Mancuso's choices for stock offering imminent
Almost every Wall Street investment bank is awaiting a call from MGM chairman Frank Mancuso to say who has been picked to arrange Leo’s expected public stock offering.
That call is likely to come shortly after an MGM board meeting scheduled for Friday.
The meeting will sum up weeks of interviews with a large group of investment banks to get advice on the studio’s long-term financing options.
Mancuso is believed to be leaning in favor of going public in the next few months. But MGM’s owners, Kirk Kerkorian’s Tracinda Corp. and Kerry Stokes’ Seven Network of Australia, have not signed off on the offering.
While most investment banks advised MGM that in this booming stock market an IPO could be successful, a couple of prominent banks are believed to have advised against going ahead with any offering. They are said to have advised that MGM does not have a sufficiently strong track record to go ahead at this stage. At least one bank is believed to have turned down an invitation to bid for the business for that reason.
Amid all of the banks nervously awaiting MGM’s decision, J.P. Morgan — the Lion’s chief lender — is considered a near certainty to play a role in the studio’s refinancing.
But MGM is expected to pick more than one bank to assist in its financial future. Apart from anything else, MGM is likely to pursue a high-yield debt offering as well as an IPO.
The only uncertainty is the attitude of the shareholders. While Seven is known to be in favor of the public float, Kerkorian’s views are not known.
MGM has declined to comment.