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HOME > Article Search Results > MGM Mirage to Decide on Offer for Casino in Detroit

MGM Mirage to Decide on Offer for Casino in Detroit

16 February 2005

DETROIT -- MGM Mirage could decide this week whether to accept an offer to buy a controlling stake in MotorCity Casino, a spokesman for the buyer said Tuesday.

Under the $525 million deal, part owner Marian Ilitch would acquire Mandalay Resort Group's 53.3 percent stake in MotorCity. Ilitch already owns 25 percent of MotorCity Casino, so she would become the majority owner if MGM agrees to the deal.

Ilitch spokesman Tom Shields said Tuesday was the deadline for MGM's response to Ilitch's offer, although he said that deadline could be extended.

MGM Mirage spokesman Alan Feldman said the company will make an announcement when it has a definitive agreement.

The terms of Ilitch's deal were revealed in a lawsuit filed Monday in Oakland County Circuit Court MotorCity's minority owners.

Atwater Entertainment Associates, which owns 11.5 percent of MotorCity, and Thomas Celani, who owns 10 percent, sued Ilitch, saying she violated the terms of their partnership when she negotiated the deal. They are seeking damages of more than $50 million.

Shields said Ilitch's offer would keep control of the casino in the hands of local investors. He said the other investors are suing to try to get a buyout of their share at an inflated price.

David Zacks, an attorney for Atwater Entertainment, denied that is the intent of the minority owners.

"What we're trying to do with the lawsuit is protect our rights under the operating agreement," Zacks said. "What we're trying to do is be treated fairly and take part in a transaction that we're entitled to take part in."

Zacks pointed out that Ilitch scheduled a meeting with the Atwater partners to discuss the deal this Friday, even though the deadline for MGM's response was Tuesday.

Shields said Ilitch has 21 days to respond to the lawsuit. Zacks and Shields said the two parties hadn't spoken Tuesday.

"She is very willing to take this ahead on her own if they don't want to proceed," Shields said.

MGM Mirage is trying to buy Mandalay Resort Group for $7 billion. Since Michigan law prohibits one company from owning more than 10 percent of two casinos in Detroit, it would either have to sell its MGM Grand Detroit or Mandalay's MotorCity if regulators approve the merger.

Ilitch's offer would ensure that MGM Mirage owns less than 10 percent of MotorCity, Shields said.

Ilitch and her husband, Michael, co-founded Ilitch Holdings, which owns Little Caesar Enterprises, the Detroit Tigers, the Detroit Red Wings, the Fox Theatre and several other notable companies

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