MGM stocks team

Goldman, Stearns, Selz join bank lineup for offer

NEW YORK — MGM rounded out its team of investment bankers for its upcoming stock offering Thursday, hiring Goldman Sachs, Bear Stearns and Furman Selz as co-managers underneath the lead managers Merrill Lynch and JP Morgan, Wall Street sources said.

The Lion is also believed to be backing off any plans for a high-yield bond offering, Wall Streeters said. An MGM spokesman declined comment on either the hirings or the status of the bond offering.

Goldman’s selection as a co-manager is somewhat surprising, as the blue-chip firm had advised the Lion not to go ahead with an offering at this time. That view cost Goldman any chance it might have had of leading the deal, sources say.

Risky business

Despite its lukewarm view about the deal’s prospects, investment bankers say the firm would likely be happy to accept a smaller role in such a situation because the bankers leading the deal bear most of the risk.

Goldman’s involvement ensures MGM has the top two banks on its team — for the year to date, Goldman is the No. 1 bank on Wall Street in terms of public offerings and Merrill is No 2. JP Morgan is No. 5, according to Securities Data Co.

MGM is expected to sell between $200 million and $400 million in stock, which will be used to help finance future production and for other corporate expansion purposes.

Abandonment of the high-yield bond offering isn’t likely to dramatically affect the Lion too much, as the bonds would have refinanced existing bank debt. MGM can refinance bank debt in other ways.

The studio is still exploring raising production financing through an off-balance sheet facility like that set up by 20th Century Fox and Universal Studios in the past year.

**contributor:Andrew Hindes

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