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MGM, Dubai World Expand Tender Offer, Set Price

LAS VEGAS-The company increases its tender offer by 50% to 15 million shares and sets the price at $80 per share, the top end of its previously announced range.

By Brian K. Miller | Updated on January 16, 2008

LAS VEGAS-MGM Mirage and Dubai World on Wednesday increased their joint Dutch tender offer to 15 million shares from 10 million shares and set the price it will pay for the shares at $80, which is the top end of the range announced last week . The price is 20% higher than MGM Mirage’s closing share price on Tuesday, Jan. 15.

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%.

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