MGM Unveils $75M Stock Repurchase Plan to Ward off Takeover

MGM Unveils $75M Stock Repurchase Plan to Ward off Takeover

Studio, riding high on hits like “Skyfall,” announces dividend

Metro-Goldwyn-Mayer is kicking off a $75 million stock repurchase program in order to guard against any hostile  or unsolicited takeover attempts, the studio said Friday.

The company said it was not making the move because it feared that any efforts were underway to purchase its assets. It also said the repurchase program could increase in size if needed.

In addition, the company announced a dividend distribution for one “purchase right” for each outstanding share of its common A and common B stock. The initial exercise price of the stock dividend, which functions like a coupon, is $110 in cash.

Also read: MGM Revenues Rise More Than 100% on ‘Vikings,’ ‘G.I. Joe’ Success

The board of directors approved both actions this month and the dividend distribution of the rights will be payable starting on Friday.

“Along with the share repurchase plan, the adoption of the Stockholder Rights Plan will allow the Board to act in the best interests of the Company and its stockholders without any distractions which could result from coercive and discriminatory takeover attempts,” Ann Mather, MGM's lead director, said in a statement.

MGM is riding high since emerging from bankruptcy in 2010. The company has put together a series of hits such as “The Hobbit” and “Skyfall” that have seen it rebound from its period in Chapter 11 protection.

Last month, the studio said revenues climbed more than 160 percent to $339 million during the second quarter of 2013 on hits like “G.I. Joe: Retaliation” and the success of TV shows like “Vikings” and “Teen Wolf.”

Among the studio's future projects are the release of “Carrie,” with Sony's Screen Gems in October and “The Hobbit: The Desolation of Smaug,”  with New Line Cinema and Warner Bros. in December. In 2014, it plans to release a sequel to “21 Jump Street” and a reboot of “RoboCop” and has several small screen projects in the works including a limited-series order for a TV show based on the movie “Fargo.”

 

 

  • Jim

    GRRRRRRRRRRRRROOOOOOOOOOOOOWL!!!!

    Somewhere, Louie B. Mayer is giving the victory laugh and Samuel Goldwyn is saying, “Shut up! I'm sleeping!!! Any gimmie back my Lion and my film reef!!!”

    • jhs39

      You probably don't remember when MGM was making a comeback in the early 1980's. Or the early 1990's. This is even less of a comeback than those two times–MGM doesn't even release movies anymore. Everything they are involved in gets released by Columbia Pictures or Paramount or Warner Brothers and nearly everything they make now is a sequel, spinoff or remake of something they own the rights to. MGM has been the most mismanaged studio in Hollywood for over 40 years–probably the only good decision they made over that entire course of time was buying United Artists after Heaven's Gate flopped. The United Artists purchase gave MGM the rights to the James Bond Series, Rocky and The Pink Panther. Without James Bond it's highly unlikely that MGM would still exist. Of course, they never managed to generate anything comparable themselves. Robocop could have been a successful film series but they screwed up the sequel. Species also could have been a successful film series but they screwed up that sequel as well. They also screwed up the sequel to their Pink Panther reboot. MGM has a long history of bad decisions and bad movies and now they're little more than a logo that you see on other studios films.

  • jhs39

    Problem one with the M-G-M comeback theory is that they released Skyfall through Columbia Pictures; The Hobbit through Warner Brothers; G.I. Joe through Paramount; Hansel and Gretel Witch Hunters through Paramount. They haven't released their own movies in years and can't really be considered a real Hollywood studio if all they do is co-produce movies with other studios. At this point they look more like Village Roadshow or Legendary Pictures than an actual Hollywood studio. Problem number two is that their entire business strategy seems to be based on doing remakes or spinoffs of titles they have the rights to (Robocop; Red Dawn; Rocky; Carrie, James Bond, Westworld, etc). They aren't really trying to develop anything original–just remake after sequel after remake after spin-off. M-G-M hasn't been a major Hollywood player since the 1960's and it doesn't look like that's going to change anytime soon, if ever.