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MGM raises $721 mil from rights offering

3.9 mil shares oversubscribed

Metro-Goldwyn-Mayer has successfully completed its stock rights offering, which generated about $721 million for the company and added 49.7 million common shares.

“The oversubscription of our rights offering underscores the financial community’s support of our vision for the new MGM,” said Alex Yemenidjian, the Lion’s chairman and CEO.

An estimated 99.3% of MGM’s shareholders exercised their rights in the offering. That rate, coupled with their oversubscription exercise, resulted in the offering being oversubscribed by nearly 3.9 million shares.

The Tracinda Group, the firm run by billionaire investor Kirk Kerkorian, remains the Lion’s largest shareholder. Tracinda bought all shares available to it in the rights offering.

As a result, Tracinda will get about 44.3 million shares, with all other shareholders getting 5.4 million. Kerkorian’s roughly 89% stake in the company will not change.

In the rights offering, stockholders of record on Oct. 15 were could buy one discounted share for every three shares they already held. The subscription price was $14.50 per share. MGM shares gained a point Tuesday to end the day at $21.50.

The rights offering brings MGM’s total common stock outstanding to about 201.3 million shares.