MGM Grand to buy back more stock

Friday, Aug. 6, 1999 | 11:39 a.m.

MGM Grand Inc. of Las Vegas said its directors have approved another buyback of up to 5 million of the company's shares over the next year.

MGM Grand completed a 12 million-share repurchase program earlier this year that saw it buy back 6 million shares at $35 each and another 6 million at $50 apiece.

The company, which last week opened a temporary casino in Detroit, has often said it would continue to buy back shares if it considered such action a good investment of its free cash flow.

"The strong performance of our existing operations and our newest casino in Detroit affords us the opportunity to execute this program while maintaining the best balance sheet in the industry," MGM Chairman Terry Lanni said.

MGM Chief Financial Officer Jim Murren said the company is "very optimistic about the pace of business here in Las Vegas and in Detroit and we feel a good corporate use of cash is to reduce debt and grow internally, and to buy back stock."

"We think our stock is the best investment in the industry. We're not trying to be the biggest company in the industry, but the best, the one with the highest margins, best earnings growth and best growth prospects," he said.

The company will make the purchases from time to time in the open market or through private placements as market conditions warrant, Murren said.

If all 5 million shares authorized are repurchased, the float would be reduced to 53 million shares from the current 58. Billionaire Kirk Kerkorian, who owns about 38 million shares, would hold about 72 percent of the total.