Tracinda Continues To See 'Substantial Value' In MGM
29 January 2011 - 7:40AM
Dow Jones News
Tracinda Corp., the investment vehicle of legendary investor
Kirk Kerkorian, said Friday that it "may explore potential
transactions" involving its sizable, long-term stake in MGM Resorts
International (MGM).
"As MGM Resorts' largest stockholder, Tracinda occasionally
receives inquiries" about its stake, Tracinda said in a filing with
Securities and Exchange Commission.
"Tracinda continues to believe that there is substantial value
in the assets of MGM Resorts and that the company is a good
long-term investment," the Beverly Hills, Calif., firm said.
"However, from time to time, Tracinda may explore potential
transactions," it added, noting that it "may ultimately not enter
into any transaction."
A Tracinda spokeswoman declined to discuss the matter further.
An MGM spokesman didn't promptly return a phone call seeking
comment.
Kerkorian, 93 years old, was MGM's controlling shareholder until
a mid-2009 stock offering by the company, owning more than half the
outstanding shares. Late last year, Tracinda participated in a
company offering and pared its stake by about 32 million shares,
pocketing about $400 million in the process.
Tracinda's currently owns about 131.2 million shares, or just
under 27% of the MGM stock outstanding, for a total present value
of more than $1.9 billion. At MGM's all-time high in late 2007,
Kerkorian's MGM stake was worth nearly $15 billion; in early 2009,
as Wall Street worried that its expensive CityCenter project and
other factors would drag the company into bankruptcy, the stake was
only worth about $300 million.
In the release, Tracinda also said it "monitors its investment
in the company by, among other things, contacting company
management to address operations and market conditions."
MGM shares recently traded down 61 cents, or 4%, at $14.59
apiece.
-By Maxwell Murphy, Dow Jones Newswires; 212-416-2171;
maxwell.murphy@dowjones.com
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