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Lion changes date

MGM pushes back planned equity offering

NEW YORK — MGM has decided to push back the road show for its planned equity offering from the first week in September to later in the month, and some on Wall Street said the company hopes its stock will be perkier at that time.

MGM insiders insisted the delay is purely a factor of scheduling issues and conflicting vacation plans ahead of a long holiday weekend. “We’re shooting for the week after Labor Day,” a spokeswoman said.

MGM plans to raise $750 million and increase its stockholder base by issuing new shares and selling them to the public. Kirk Kerkorian, the studio’s 90% owner, has agreed to buy any shares that aren’t taken up in the offering — the first big market transaction since MGM’s new leaders Alex Yemenidjian and Chris McGurk unveiled what they hope will be a revitalized and newly profitable company.

However, a secondary offering, unlike an IPO, is priced according to where a company’s shares are trading, and MGM stock has been trending down after hitting a 52-week high of $22 earlier this summer.

“I think they’re waiting because they don’t want to sell stock at $17,” said one media portfolio manager. Analysts have noted that, in a sort of Catch-22, investor anticipation of a big block of equity coming to market can weigh on a stock.

No worries

But Wall Street doesn’t seem worried. In fact, analysts have been slapping strong “buy” recommendations on MGM. The latest was Seidler Cos.’ Jeff Lodgson, who initiated coverage Tuesday with a 12-month price target of $26.

“Over the past few months, new management has been put in place and a well-defined business strategy has emerged that we believe is attractive,” he wrote.

MGM’s plans includes developing branded cable channels, focusing on first-run television syndication and carefully picking and co-financing a slate of new film projects.

The shares closed down 25¢ to $17.25.

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