Move follows strong second quarter
The privately held studio, which has posted improved financial results this year, said the action had not been taken as a result of fears that efforts were underway to purchase its assets. It also said the repurchase program could increase in size if needed.
The company also disclosed a dividend distribution for one “purchase right” for each outstanding share of its common A and common B stock. The initial exercise price of the stock dividend is $110 in cash.
“Along with the share repurchase plan, the adoption of the Stockholder Rights Plan will allow the Board to act in the best interests of the Company and its stockholders without any distractions which could result from coercive and discriminatory takeover attempts,” said Ann Mather, MGM’s lead director, said in a statement.
MGM, which emerged from bankruptcy in late 2010, has been posting improved financial results this year, thanks to its James Bond and Hobbit franchises. It reported last month that second quarter revenues had nearly tripled to $339 million, compared with $128.4 million.
MGM said at that point that the revenue gains stemmed from the international home entertainment release of “The Hobbit: An Unexpected Journey,” the continued worldwide home entertainment performance of “Skyfall,” higher TV licensing revenue lead by strong VOD sales of “Skyfall” and licensing of the TV “Vikings,” home entertainment promotions of the James Bond library and higher revenue from co-produced films.