Playing for A Wynn

By John Greenwald

Forget Siegfried and Roy and their white tigers. Of all the spectacles on display in Las Vegas last week, none attracted the high rollers as much as the sudden arrival of the "Steve and Kirk Show." That's Steve as in Wynn, 58, the master builder of Vegas and chairman of Mirage Resorts, whose lavish spending on casinos like the $1.6 billion Bellagio has made Mirage about as popular as snake eyes with investors on Wall Street. The Kirk is for Kerkorian, 82, the reclusive Beverly Hills billionaire with a knack for doubling his bets and winning. The rival moguls took center stage when Kerkorian's MGM Grand bid $17 a share, or $3.4 billion, for Mirage, which only the day before had been trad- ing at $10 a share and change.

The surprise bid set up a clash of Strip titans and stunned gaming-industry observers. Steve Wynn cave to Kirk Kerkorian? No way. Besides, Nevada law frowns on unfriendly corporate takeovers--and even a Kerkorian insider admits, "Wynn has a grade-A defense." Perhaps to get around that, MGM Grand called its offer friendly, at least for now. Still, Kerkorian takes no for an answer only in exchange for a hefty profit. In 1996 he scrapped a run at Chrysler after his stock in the carmaker reportedly doubled in value to nearly $3 billion. (Kerkorian currently owns about 5% of DaimlerChrysler.)

A combined MGM-Mirage is a jackpot worth fighting for. It would become the No. 2 U.S. gambling behemoth, behind Park Place Entertainment, and would own 50% of the lucrative tables for baccarat, a card game in which players can wager as much as $250,000 at a turn. So coveted are Mirage's four Las Vegas casinos that both Park Place and Harrah's are reportedly weighing their bids for the company.

Kerkorian is clearly counting on Mirage's disillusioned shareholders, who have watched their stock slide from a 52-week high of $26 a share last May, to pressure a reluctant Wynn into making a deal. Some owners are eager to do just that. Hours after Kerkorian launched his offer, five Mirage shareholders brought class actions in Las Vegas to demand that Wynn and his board seriously consider all bids.

Analysts expect Wynn, who is gradually losing his sight to a degenerative eye disease called retinitis, to reject Kerkorian's bid as too little when the board meets this week. "There's no question that the offer isn't high enough," says a Mirage insider. "The real question is, What do we want to be when we grow up?" Translation: unless Wynn can win over Wall Street, his long-term chances of evading a predator like Kerkorian could be just a mirage.

--By John Greenwald. With reporting by Jeffrey Ressner/Los Angeles

With reporting by Jeffrey Ressner/Los Angeles