Miss. OKs MGM Grand, Mirage merger

JACKSON, Miss. -- Mississippi gaming regulators gave unanimous approval to MGM Grand Inc.'s acquisition of Mirage Resorts Inc. today, and said they think the company will bring more casinos to the state.

The Gaming Commission granted MGM Grand regulatory approval after investigating the company's corporate officers, including director and majority holder Kirk Kerkorian, and examining its holdings and subsidiaries.

The $6.4 billion merger will give MGM ownership of all Mirage properties, including the Beau Rivage resort, its first casino in Mississippi.

Speaking to gaming commissioners, Kerkorian said the first trip he took to see Mirage's properties was to the casino in Biloxi. Kerkorian holds a 60 percent stake in MGM.

"I was totally impressed with the people and the hotel. I just couldn't believe it," Kerkorian said.

Built in 1994, the $700 million Beau Rivage is the largest and most luxurious casino in Mississippi, said casino analyst Jay Osman of Osman Holding Co. in Biloxi.

But it has suffered from lingering criticism that its luxury is too upscale for Southern customers.

"The property is probably too much for that market on a lot of different levels," said Daniel Davila, senior leisure and entertainment analyst with Hibernia Southcoast Capital in New Orleans. "There is clearly a need for that type of product, but not along the scope to which Mirage built it."

John Redmond, co-CEO at MGM, said the company will market the resort to a cross-segment of customers, and use its other resorts as promotional tools for the Beau Rivage.

"It makes sense to look at this property as something that we would want to cater to all market segments, as opposed to just one," he said.

MGM's March 6 acquisition of Mirage is expected to be completed as early as June after approval is granted by Nevada gaming regulators and Mirage shareholders.

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