International Herald Tribune, France
New York Times
June 7 2004

Kerkorian takes old path in bid for rival

Andrew Ross Sorkin NYT June 07, 2004

Kirk Kerkorian just can’t stay away from the tables.

Kerkorian, the 86-year-old financier who owns the MGM Mirage hotel
and casino empire, took another gamble late Friday night by making
an unsolicited $4.5 billion bid to buy a rival farther down the Las
Vegas Strip, the Mandalay Resort Group.

But Kerkorian’s seemingly surprise pubic bid was not exactly a surprise
to insiders: the two companies had been knee-deep in private merger
talks last week, executives involved in the discussions said Sunday.

Those talks were sent into chaos, they said, when Mandalay’s share
price jumped $5.65, or more than 10 percent, to $60.27, adding hundreds
of millions of dollars to Mandalay’s value, after the company reported
that its first-quarter earnings had nearly doubled.

So late Friday, Kerkorian made what may be an especially clever
negotiating play: he immediately made his offer of $68 a share for
Mandalay public in an effort to keep its shares from going even higher.

The maneuver comes straight out of Kerkorian’s playbook: he did the
same thing in 2000 when he acquired Mirage Resorts from Steve Wynn
in a prolonged battle that began much the same way.

The purchase would give MGM Mirage ownership stakes in several
well-known casinos on the Las Vegas Strip, including the Luxor, the
Excalibur and the Monte Carlo, as well as properties in Mississippi,
Michigan and Illinois. The company, which already owns the Bellagio,
the MGM Grand and the Mirage, among others, would assume about $2.8
billion in Mandalay debt.

Based on Mandalay’s closing price Friday, the offer represents about
a 13 percent premium; it would have been a 23 percent premium if the
offer had been made Thursday.

The New York Times