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Mirage Resorts Rejects Offer from MGM Grand

The company also denounced the "highly opportunistic timing'' of the MGM proposal, saying it would be willing to consider a better deal. Mirage's board also adopted a poison pill, to make a hostile acquisition more expensive.

The company "noted that the proposal letter coincides with an especially low point in the historical valuation of gaming companies and a low point in the financial markets' recognition of Mirage Resorts' operations and properties.''

Mirage said it "would be willing to consider a transaction which would fairly reflect the long-term values inherent in the Mirage properties, brand name and good will, rather than an opportunistic bid which is timed to maximize values for the bidder. Accordingly, Mirage Resorts is advising MGM Grand of its rejection of the $17 proposal and its willingness to discuss a transaction that recognizes the real value of Mirage Resorts.''

The poison pill adopted by Mirage's board Tuesday consists of one "Preferred Share Purchase Right'' for each share of common stock. The rights are exercisable if a person or group acquires 10 percent or more of the common stock or begins a tender offer which would result in ownership of 10 percent or more.

Using the rights at their then-current exercisable price, the holder could buy common stock having a market value of twice the exercisable price. The holder could also buy stock in the acquiring company on the same basis.

The rights will be issued as a dividend distribution on March 20 and expire in 10 years.

"The rights will not prevent a takeover,'' Mirage said, "but should encourage anyone seeking to acquire the company to negotiate with the board prior to attempting a takeover.''

Mirage said the board acted on the advice of Goldman, Sachs & Co., its financial advisor, and Wachtell, Lipton, Rosen & Katz, its legal counsel.

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