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MGM sets terms to IPO
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October 21, 1997: 8:25 p.m. ET
Famed movie studios to sell 12.5 million shares between $20 and $23
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NEW YORK (CNNfn) - Metro-Goldwyn-Mayer Inc. has set the terms of its much-anticipated initial public offering, the legendary movie studio said on Tuesday.
MGM - the Hollywood studio responsible for more than six decades of hits such as "Gone with the Wild" and the James Bond film series - plans to sell 12.5 million common shares between $20 and $23 each.
At a mid-range price of $21.50 each, the initial public offering would fetch about $268.8 million, giving MGM much-needed funds to shore up its balance sheet and reduce debt.
MGM spokesman Craig Parsons said the studio expected to have 65.2 million outstanding common shares immediately after the completion of the IPO, yielding a equity capitalization of $1.4 billion.
Kirk Kerkorian's Tracinda Corp., which last year acquired the studios for a third time in its corporate history, will own a majority control with 55.6 percent of the outstanding stock.
Seven Network Ltd., an Australian company that partnered with Kerkorian in last year's transaction, will own 24.7 percent of the company immediately after the offering.
MGM's management will own 0.9 percent.
When completed, the IPO will give investors a rare opportunity to focus solely on the operations and growth prospects of a major Hollywood studio, without other businesses such as music, publishing or theme parks.
The company stated previously it hoped to peg the success of its offering (and subsequent road show) to publicity surrounding the release of the 18th installment of the James Bond series, "Tomorrow Never Dies."
But possible legal entanglements with a competing movie studio could steal some of the limelight away from the offering.
Columbia Pictures, a unit of Sony Corp.'s Sony Pictures Entertainment division, last week said it has entered into an agreement with producer/director Kevin McClory and his company, Spectre Associates Inc., to make a series of new James Bond feature films.
MGM has stated it is evaluating possible legal action.
-- by staff writer Robert Liu
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