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Casinos & Hotels

Unloading MGM (MGM)

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By Jon C. Ogg Updated Published

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MGM Resorts International (NYSE: MGM) has been under pressure this morning on news that Kirk Kerkorian and the company were selling shares in a secondary offering.  The secondary offering priced, and the deal terms were 40,900,000 shares at $12.65 per share from MGM.  Kerkorian’s Tracinda also sold 27,782,000 shares.  MGM closed at $13.61 on Tuesday and shares have traded in a range of $8.54 to $16.66 in the last 52-weeks.

It is more common of late to get a larger underwriting group, but the entire sale is going through Barclays Capital.  MGM and Tracinda have granted Barclays a 30-day over-allotment option to purchase up to 6.135 million shares from MGM and 4,167,300 shares from Tracinda.

MGM will use the net proceeds for general corporate purposes and for debt repayment.  Kerkorian will go buy something else with his new Tracinda funds.

MGM closed at $13.61 on Tuesday and shares have traded in a range of $8.54 to $16.66 in the last 52-weeks.  The market on Wednesday has shares down at $12.43.

To show how this compares to normal volume, an average day’s trading volume is 22.47 million shares.  The share sale comes to more than $860 million and the market cap before the effects of this offering is currently listed as about $5.5 billion.  Kerkorian will still hold more than 25% of MGM after the sale.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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