MGM-Mirage, Mandalay deal seen as matter of when, not if- 2005-01-18

News brief: Federal antitrust approval of MGM Mirage's $7.9 billion buyout of the Mandalay Resort Group didn't materialize Friday. As reported by: Gaming Wire:
Federal antitrust approval of MGM Mirage's $7.9 billion buyout of the Mandalay Resort Group didn't materialize Friday.

Still, gaming analysts and industry observers believe the U.S. Federal Trade Commission's blessing of the transaction is a matter of when -- not if -- it will be announced.

On Friday, an FTC official said an agency spokeswoman erred Thursday in commenting on the pending merger between the casino giants, which would create the world's largest casino operator.

MGM Mirage has said that it hopes to conclude the buyout before the end of March. Once federal officials give their OK, Nevada gaming regulators are expected to weigh in on the merger.

One gaming analyst, who asked not to be identified, said he believes approval is eminent.

"If there was a problem, we would have heard about it already," the analyst said. "Word is the FTC could announce shortly."

Bloomberg News reported Thursday that sources familiar with the transaction said the merger would win approval without either company having to sell any of their Las Vegas casinos. According to the news service, FTC lawyers concluded they couldn't prove the MGM Mirage-Mandalay deal would mean higher room rates or fewer promotional discounts aimed at attracting gaming customers.

Mitchell Katz, a spokesman for the FTC, said Friday THAT the commission's policy is not to comment on pending mergers until after early termination of the investigation is granted. The companies involved in the merger are notified a day in advance of the transaction before the FTC posts the early termination notice on its Web site.

The FTC spokeswoman on Thursday said the merger could be posted on the agency's Web site Friday morning.

In a buyout of this magnitude, Nevada gaming regulators traditionally wait for FTC approval before having their own hearings on the matter. Nevada gaming agents are still investigating the MGM Mirage-Mandalay matter, but if the FTC rules soon, the merger could be in front of state regulators as soon as February.

Mandalay Resort shareholders approved the merger in early December and a week later, Mississippi's three-member gaming commission unanimously approved the transaction, which covers two of the state's 29 casinos.

The MGM Mirage-Mandalay marriage could be supplanted by the proposed combination of Harrah's Entertainment and Caesars Entertainment, which would become the world's No. 1 casino company if the FTC approves that takeover. Harrah's offered to buy Caesars for $9.4 billion in July and completion of that transaction is expected in the middle of the year. The FTC spokesman said that matter is still pending.

Source: Gaming Wire

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