Shares of Mandalay Resort Group (MBG) rose more than 16 percent and beyond the offer price by rival MGM Mirage (MGG) Monday as investors bet that a rival bidder or a sweetened offer for the casino operator would emerge.

Harrah's Entertainment Inc., the only casino company with an investment-grade credit rating, distanced itself from the chance of countering MGM's $4.85 billion offer to buy Mandalay Resort Group.

Shares of Mandalay traded as high as $72.65, a record which also surpassed the MGM offer price of $68.

No. 3 MGM gave Mandalay's board until Tuesday afternoon to accept or decline its offer, the offer letter sent Friday showed.

MGM also said in the letter that a 10 percent rise in Mandalay stock on Friday, before its offer was made public, could have been due to a leak of the bid.

Casino industry executives, meanwhile, expected a feeding frenzy for the leftovers of any merger between MGM and Mandalay if the new company were forced to sell a Detroit casino or resorts in Las Vegas to satisfy regulators.

A merged company would control nearly 50 percent of the hotel market on the Las Vegas Strip (search) and about one-third of the city's casinos.

Harrah's spokesman Gary Thompson said his company would keep its focus on previous plans to expand in Las Vegas, generally expected by analysts to include the opening of a new casino on the Strip under the Horseshoe name, a brand acquired in a $917-million merger Harrah's hopes to close this month.

"We have been reviewing options for growth in Las Vegas, aggressively reviewing expansion, and will continue to do so. I don't think the options we are reviewing are going to change based on Friday's activity," Thompson told Reuters.

A source familiar with negotiations between Mandalay and MGM Mirage said that MGM did not expect any rival bidders.

Caesars Entertainment Inc., currently the largest gaming company by revenue, declined to comment, although analysts said Caesars would face more difficulty raising financing than Harrah's for any counter-offer for Mandalay.

"Caesars is kind of constrained by its balance sheet," said Deutsche Bank analyst Marc Falcone.

Wall Street analysts said MGM would still sweeten its bid by a few dollars per share above its $68 offer.

UBS analyst Robin Farley believed that even if MGM raised its bid to $72 per share, the deal would increase or be neutral to its cash flow.

Earlier, Fitch warned it may cut the debt ratings on MGM and Mandalay due to the takeover bid.

Mandalay owns and operates Mandalay Bay (search), Luxor, Excalibur and other properties in Nevada and various states. MGM Mirage owns the renowned Bellagio, MGM Grand Las Vegas (search), Mirage, and other properties in Las Vegas, Atlantic City and other areas.

Mandalay closed up 16.5 percent, or $9.96, to $70.23 on the New York Stock Exchange. MGM Mirage fell 2.6 percent or $1.19, to $44.84.