Kerkorian sells 11% of his stake in MGM MIRAGE

Tuesday, Nov. 6, 2001 | 10:52 a.m.

Billionaire Kirk Kerkorian has sold 10 million shares of MGM MIRAGE stock, roughly 11 percent of his stake in the Las Vegas-based casino resort operator.

Kerkorian sold the shares Nov. 2 at a price of $21 per share, putting the sale price at $210 million, according to a Monday filing with the Securities and Exchange Commission. The shares represented more than 6 percent of MGM MIRAGE's total outstanding shares.

Richard Sobelle, an executive with Kerkorian's Tracinda Corp., said the sale was for "year-end tax reasons."

Kerkorian remains the controlling shareholder of the Las Vegas-based gaming giant, but his ownership was cut from 57.3 percent to 51.6 percent.

"Tracinda and Mr. Kerkorian have no present intention to sell additional shares of common stock at this time and intend to maintain their holdings in the common stock above 50 percent of the outstanding shares," the Tracinda filing stated.

"I've been here four and a half years, and he (Kerkorian) has sold stock every year of the last four," said Jim Murren, MGM MIRAGE president and chief financial officer. "Tracinda is an investment company, and it buys and sells securities. As a result, often time there will be trades related to tax strategies."

While the $21 per share Kerkorian fetched for his MGM MIRAGE shares was well above the $16.19 low it reached it late September, it is 26 percent below pre-Sept. 11 trading levels. But Murren said he believed the sales did not signal Kerkorian was losing confidence in the company.

"If there was any type of signal he was losing interest, certainly he wouldn't sell just 10 million out of 91 million," Murren said. "It would have been a much more significant reduction. Tracinda is in no way, in my dealings with them, lost their enthusiasm for the gaming industry or MGM MIRAGE."

Murren added the sale would benefit investors in some respects.

"From an MGM MIRAGE standpoint, it's good news, because it increases the liquidity of our stock by increasing the public float (the number of shares available for public trading)," Murren said. "It makes our stock more readily tradable."

MGM MIRAGE had just 37.7 million shares in its float prior to the Kerkorian sale.

MGM MIRAGE closed Monday at $22.64, up 14 cents.