Kerkorian sells some casino stock, buying movie studio shares

Wednesday, Feb. 7, 2001 | 11:48 a.m.

SUN STAFF AND WIRE REPORTS

Kirk Kerkorian, the controlling shareholder of Las Vegas-based casino giant MGM MIRAGE, sold 1.89 million shares of MGM MIRAGE stock Tuesday afternoon.

Jim Murren, chief financial officer of MGM MIRAGE, said the shares were held directly by Kerkorian, rather than through Tracinda Corp., Kerkorian's investment firm that holds a majority of the company's shares. Kerkorian held 95 million shares both personally and through Tracinda prior to the sale.

Murren said he didn't know the sale price, though Dow Jones put the price at $30.25 per share. That would have grossed Kerkorian $57.2 million.

Separately, Kerkorian agreed to buy $325 million of preferred stock in Metro-Goldwyn-Mayer Inc. to help the movie studio he controls finance an investment in cable TV channels, a regulatory filing said. Murren said he didn't know if the transactions were connected.

"He has periodically sold MGG (MGM MIRAGE) stock in his personal account, but he's been a massive buyer through Tracinda," Murren said. "He bought $600 million in MGG stock less than a year ago. He's always indicated he wanted to sell the personal stock."

Santa Monica, Calif.-based Metro-Goldwyn-Mayer agreed last week to buy a 20 percent stake in four cable channels owned by a unit of Cablevision Systems Corp. for $825 million. The studio also is selling $220.5 million of stock to outside investors to help pay for the purchase, the company disclosed in a separate filing.

"The proceeds of that sale (to Kerkorian) and this offering (to other investors) will be used for our investment in the four cable channels," the studio said in a Tuesday filing with the Securities and Exchange Commission.

Kerkorian, 83, is putting up 39 percent of the money by buying 15.7 million Series B preferred shares for $325 million, or $20.68 apiece, according to the shareholder's filing with the SEC.

Kerkorian plans to convert the preferred into the same number of common shares, the filing added, boosting his stake in the studio to 83 percent with about 195 million shares.

Metro-Goldwyn-Mayer, which owns one of the world's biggest film libraries, is selling as many as 10.7 million common shares at the same $20.68 price to "institutions and other financially sophisticated investors," the company filing said.

The $220.5 million raised from outside investors, plus Kerkorian's $325 million, would give the studio $555.5 million -- two-thirds of the amount it plans to invest in cable TV.

"We plan to obtain the remaining cash needed to complete our cable investment from the proceeds of sales of additional shares of our common stock," the studio said in its filing.