LAS VEGAS - MGM Mirage would control about half the hotel rooms on the Las Vegas Strip if it manages to pull off a multibillion dollar buyout of Mandalay Resort Group.

MGM Mirage, as the world's largest casino company, also would dominate the most lucrative gambling market in the world with 10 hotel-casinos along the famous five-mile stretch of Las Vegas Boulevard, including the immensely profitable Bellagio and Mandalay Bay resorts. It also would control about 40 percent of the slot machines and 44 percent of the gambling tables.

MGM Mirage would hold sway over Las Vegas if its purchase is successful, Deutsche Bank gambling analyst Andrew Zarnett said Monday.

MGM Mirage surprised the casino industry by offering $4.85 billion dollars in cash and the assumption of $2.8 billion in Mandalay debt late Friday. Few had expected the blockbuster offer even though MGM Mirage has been aggressively seeking acquisitions, especially in the United Kingdom.

MGM Mirage offered $68 a share, but analysts said negotiations and a possible bidding war could drive the price above $75 to $80 share.

In a U.S. Securities and Exchange Commission filing Monday, MGM Mirage said it was forced to reveal the offer after Mandalay's stock soared 10 percent Friday.

It's not clear if merger rumors prompted the run-up in prices. Mandalay Resort Group announced record first-quarter earnings late Thursday thanks to its new tower at Mandalay Bay called THEhotel and a lucrative convention center that opened in 2003.

Mandalay said it's evaluating the $7.65 billion offer, which was characterized by a source close to the talks as "friendly but unsolicited." It has hired Merrill Lynch and the New York law firm of Cravath, Swaine & Moore as financial and legal advisers for the negotiations that began last week.

While the merger would allow the proposed gambling goliath to grab more than 36,000 of the approximately 73,000 rooms on the Strip, some analysts think it could help competitors

"It could create more stability in pricing overall," Zarnett said. "It benefits all parties."

Caesars Entertainment, with 13,000 rooms on the Strip, would be the second biggest player on the Strip after a merger. Harrah's Entertainment, currently the world's largest gambling company, has two casinos - Harrah's and the Rio - in Las Vegas.

With combined annual revenues of more than $6 billion, the merged company would leapfrog Caesars and Harrah's.

MGM Mirage owns or operates 12 casinos in Nevada, New Jersey, Mississippi, Michigan and Australia, and has investments in two other resorts in Nevada and New Jersey. It has a 25 percent interest in British casino developer Metro Casinos Ltd.

Mandalay Resort Group owns and operates 11 casinos in Nevada and has about 15,000 rooms on the Strip. It has ownership in other properties in Nevada, Illinois and Michigan, and owns a hotel-casino in Tunica County, Miss.

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