Las Vegas casino operator, MGM Mirage, has agreed terms for a $7.9bn (£4.3bn) takeover of rival operator, Mandalay Resort Group.

MGM initially offered $68 (£37) per Mandalay share, but the final deal is for $71 (£39) per share in cash, a premium of 30 per cent on its closing price on 3 June, the day before the initial offer was made.

The total value of the transaction includes equity value of $4.8bn (£2.6bn), $0.6bn (£0.33bn) in convertible debentures and assumption on $2.5bn (£1.4bn) outstanding debt.

The deal is now subject to the approval of both boards of directors and Mandalay shareholders.

Terry Lanni, chair and CEO of MGM Mirage, said: “The combination of these two great companies will provide Mandalay shareholders with a premium price for their shares as well as providing several strategic benefits to shareholders in MGM Mirage.”

MGM – which operates the MGM, The Mirage, The Bellagio and Treasure Island casinos in Las Vegas – was recently involved in a bidding war for UK-based gaming group, Wembley, but withdrew its offer after being trumped twice by rival bidder, BLB Investors.

Mandalay Resorts operates the Las Vegas casinos, Mandalay Bay, Excalibur, Luxor and Circus Circus.

If the takeover deal goes through, the enlarged group would most likely have to dispose of some of its casino assets to satisfy competition authorities. Details: www.mgmmirage.com