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MGM Mirage to take $1.2 billion writedown on Mandalay

NEW YORK
Fri Jan 9, 2009 5:55pm EST

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In this file photo traffic is seen on Tropicana Avenue in Las Vegas, Nevada, in front of the MGM Grand, June 15, 2004. REUTERS/Ethan Miller

NEW YORK (Reuters) - MGM Mirage (MGM.N) said on Friday it would write down the value of the Mandalay Resort Group, the casino company it bought in 2005 for about $5 billion.

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In the last year or so, the Las Vegas gambling boom has ended and the real estate market deteriorated sharply, sending the value of casino properties plunging and putting a financial squeeze on operators.

In a regulatory filing late on Friday, MGM Mirage said it will recognize a non-cash impairment charge of about $1.2 billion in its fourth-quarter results, representing substantially all of the goodwill it recognized when it closed the deal.

The purchase of Mandalay, which operates the Mandalay Bay, Luxor and Excalibur resorts in Las Vegas, propelled MGM Mirage into the position of the world's No. 2 casino company, behind Harrah's Entertainment.

(Reporting by Bill Rigby; editing by Richard Chang)
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