Los Angeles Business Journal

MGM Holdings Adopts ‘Poison Pill,’ Stock Buyback Plans

By Deborah Crowe Friday, September 13, 2013

The Beverly Hills owner of Metro-Goldwyn-Mayer studio on Friday said that its board had adopted both a $75 million stock buyback program, and a “poison pill” plan to discourage hostile takeover attempts.

MGM Holdings Inc., with properties that include the James Bond franchise and “The Hobbit: An Unexpected Journey,” said it was not aware of any unfriendly takeover efforts. These “are legal tools designed to assure that the company’s stockholders receive fair and equal treatment,” Scott Packman, MGM’s general counsel and corporate secretary, said in a statement. “The stockholder rights plan is not intended to deter or discourage bona fide offers and proposals that the board in good faith determines are fair, advisable and in the best interests of all of the company’s stockholders.”

MGM Holding has about 55 million shares outstanding, the company said, and the $75 million repurchase authorization would enable a buyback of about 2.5 percent of the stock. The stock was listed at $58.50 Friday on the Over-the-Counter Bulletin Board, which gives the company a $3.21 billion market cap. It is primarily privately traded. Hedge fund investor Dan Loeb is said to be among the company’s largest investors.

The company filed with the Securities and Exchange Commission for an initial public offering in July 2012, but has yet to go forward with an IPO.

“MGM’s healthy balance sheet and efficient operating structure position the company for a wide array of options to maximize shareholder value,” Ann Mather, MGM’s lead director, said in statement. The “board is considering all of these options carefully, and has approved the share repurchase plan in recognition of the company’s strong performance to date and future prospects.”