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Rod Smith

Mandalay Group Denies Exit Strategy in Stock Sale by Two Managers

7 October 2003

Las Vegas Gaming Wire

Mandalay Resort Group released a statement Friday denying that Mike Ensign or Bill Richardson had any exit strategy for leaving the company.

The Review-Journal reported Friday that Ensign, Mandalay Resort's chairman, and Richardson, the company's vice chairman, sold their remaining 2.9 million shares in the company for roughly $120 million each at the end of September, according to federal Securities and Exchange Commission documents filed Wednesday.

The SEC documents offered no explanation for the sales, and company executives either declined to comment or could not be reached Thursday.

In the absence of any explanation from the company, analysts speculated that the stock sales could mean Ensign, 64, and Richardson, 55, are planning to leave the company and are diversifying their personal investment portfolios.

However, John Marz, the company's senior vice president, said in the statement Friday that speculation that the stock liquidation is a signal of a shift or a change in the management of the company is "misguided and uninformed."

"The team that has brought Mandalay Resort Group to its success and diversity in recent years will remain intact and will continue to guide this company to future business achievement in the resort casino industry," Marz said in the statement.

Marz was traveling and unavailable for further comment, and holding company executives did not return phone calls Friday. Gordon Absher, spokesman for Mandalay Bay Resort, said the sale "obviously" was not an indication of an exit strategy.

Ensign's and Richardson's most recent sales followed the pair's sale last summer of about $140 million worth of shares each and their recent sale of about $40 million worth of shares.

The earlier sales reduced the executives' holdings in the Las Vegas-based company by more than half, and the new sales are believed to essentially close out all of their stock holdings in Mandalay Resort Group.

Before the sales, Ensign and Richardson held a controlling ownership stake in the company, which was formed when Circus-Circus Enterprises was reorganized as Mandalay Resort Group in 1995.

Mandalay Resort Group owns and operates Mandalay Bay Resort, Luxor, Excalibur and Circus Circus in Las Vegas, and hotel-casinos in Henderson, Reno, Jean and Laughlin. It also owns a hotel and dockside casino in Tunica County, Miss. And it is a majority investor in a temporary casino in Detroit.

Mandalay Resort Group shares were unaffected by the news Friday, closing at $39.47, down 0.03 percent for the day on volume of 1.3 million shares.

Also, Morgan Stanley on Friday increased its rating for Mandalay Resort Group to "overweight."