Wednesday, March 23, 2005

Deal to sell MotorCity Casino to Marian Ilitch formally announced

By Adam Goldman / Associated Press

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LAS VEGAS - Gambling companies MGM Mirage Inc. and Mandalay Resort Group fomally announced Wednesday that they intend to sell a Detroit casino to Marian Ilitch.

The companies also said they were pushing back the closing date of their merger to June 30 to get approval from regulators in Illinois and Michigan.

Under the agreement reported by The Detroit News a week ago, Mandalay will sell its 53.53 percent interest in the MotorCity Casino for $525 million to an affiliate of Ilitch, who owns 25 percent of the casino.

Ilitch co-founded the Little Caesar Enterprises Inc. pizza chain with her husband, Mike. The Ilitch family also controls the Detroit Tigers and Detroit Red Wings sports franchises.

MGM Mirage said the appointment last week of new members to the Illinois Gaming Board will let the company's application before the regulatory agency move forward.

MGM Mirage officials now expect the transaction to close in the second quarter of this year. Company executives had hoped to wrap up the deal in the first quarter.

The companies' merger remains subject to closing conditions and successful completion of the approval process in Illinois and Michigan.

MGM Mirage agreed in June to acquire rival Mandalay Resort for $4.8 billion in cash, $2.5 billion in debt and $600 million in convertible debentures.

The other planned casino megamerger, between Caesars Entertainment and Harrah's Entertainment, still is pending Federal Trade Commission and state approval.

Once the mergers are completed, MGM Mirage would be the second-largest gambling company in the world behind Harrah's in terms of revenues.

The Federal Trade Commission has approved MGM Mirage's proposal to buy Mandalay.

MGM Mirage had to sell one of two Detroit casinos because Michigan law requires the city's casinos be owned separately. MGM Mirage already owns the MGM Grand, and Mandalay owns a majority stake in MotorCity Casino.

Many of the world's most famous casinos, The Mirage, Bellagio, MGM Grand, Luxor, Circus Circus and Mandalay Bay would fall under the new MGM Mirage corporate umbrella, which would have combined yearly revenues of about $7.3 billion.