MGM Resorts, Tracinda selling shares

AP News
Posted: Oct 12, 2010 7:03 PM
MGM Resorts, Tracinda selling shares

Casino giant MGM Resorts International said Tuesday that it plans to issue up to 47 million shares of common stock while billionaire investor Kirk Kerkorian, its largest shareholder, is selling more nearly 32 million of the shares he holds in the company.

Las Vegas-based MGM Resorts also said Tuesday that it has received an offer of more than $250 million for its half of the Borgata Hotel Casino & Spa in Atlantic City, N.J.

MGM Resorts spokesman Gordon Absher declined to say who made the offer.

Kerkorian's Tracinda Corp., which now owns 37 percent of the company's outstanding shares, said it would sell 27.8 million shares to other investors and give underwriters Barclays Capital Inc. an option to buy an additional 4.17 million shares.

MGM Resorts is issuing nearly 41 million shares and giving Barclays an option to buy 6.14 million more.

The company's announcement of the offers and sale also included a forecast for third-quarter earnings. MGM Resorts expects to report a loss of 72 cents per share, compared with a loss of $1.70 per share a year earlier. Analysts surveyed by Thomson Reuters on average expected a loss of 69 cents per share.

MGM Resorts shares fell 91 cents, or 5.7 percent, to $12.70 in after-hours trading after ending the day up 13 cents to $13.61.

The 47 million new shares amount to a nearly 11 percent increase in MGM Resorts' outstanding shares. If both MGM Resorts and Kerkorian sell all the shares they have offered and Barclays fully accepts both options, Kerkorian would be left with just under 27 percent of the company.

MGM Resorts said it plans to use proceeds from the sale of its new shares for general corporate purposes, including reducing debt. The company said it would not get anything from Kerkorian's sale.