last week

The acquisition goal represents approximately 5.1% of total shares and 12.5% of the free float, which is the number of unrestricted shares not held by large owners like Kirk Kerkorian (Tracinda Corp.), who controls 52.4% (153.8 million) of MGM's outstanding shares. Kerkorian in December sold Dubai World five million shares of MGM stock via his charity, the Lincy Foundation, but has said he will not tender any shares as part of this upcoming offering.

MGM will take 56.6% of whatever shares are tendered and Dubai World will take the remainder. If the duo makes its 15-million-share goal, the purchases would reduce MGM's outstanding share count from approximately 293.7 million to approximately 285.2 million and lift Dubai World's ownership from approximately 6.7% to approximately 9.8%.

"We suspect that by fixing the price at the high end, the Board is taking the long-term view that MGM's value is substantially higher than $80 per share, which cleans up investor debate over what price within a range to tender," said JP Morgan gaming analyst Harry Curtis today in a note to clients. "Fear has been rampant that MGM would miss 4Q numbers. This upsizing appears to contradict that concern."Last week, Curtis said investors with a longer-term view "who agree with us that MGM's longer-term value could be in the $110 to $170 range, will likely see this as affirmation of MGM's longer-term value and choose not to tender stock. However, we believe those who are more concerned about short-term trends, the economy, consumer outlook and operating trends through 2008 may want to take the opportunity to tender stock."