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.
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.”