MGM, IAC Buying $405M in Stock from Corvex Management
MGM Resorts International (NYSE:MGM) and Barry Diller’s IAC/InterActiveCorp (NASDAQ:IAC) proclaimed today they are purchasing ennead billion shares of the cassino operator. The purchase comes from shares held by Keith Meister’s Corvex Management at $45 apiece inward a transactions precious at $405 million.
The gaming accompany and IAC are from each one buying 4.5 1000000 shares from the hedgerow fund controlled by the MGM gameboard member for $202.5 million. At $45, that’s somewhat at a lower place the Mandalay Bay operator’s Feb. 11 closing price of $45.46.
The word arrives sevener months after a Corvex Form 13F filing with the Securities and Exchange Commission (SEC). That revealed the money manager upped its MGM stakes to 15.67 one thousand thousand shares during the s quarter of 2021. At that time, the duck fund was the fourth-largest institutional investor inward MGM, trailing only if fund issuers Vanguard, BlackRock, and State Street.
Following the transaction, pecuniary resource associated with Corvex will bear on to own close to 6.67 trillion shares, or 1.5 percent of the company’s prominent usual stock,” according to a statement issued past MGM and IAC.
Meister testament hold back his place on the gaming firm’s table of directors.
Corvex, IAC Relationships Fruitful for MGM
Meister joined MGM’s get on in Jan 2019, eventually decorous single of the leaders of the thrust for the keep company to monetise its existent demesne holdings.
That effort featured an regalia of transactions, including sale-leasebacks of Las Vegas Strip venues, such as Aria/Vdara, Bellagio, Mandalay Bay, and MGM Grand. Additionally, VICI Properties (NYSE:VICI) is acquiring MGM Growth Properties (NYSE:MGP) for $17.2 1000000000 in stock, creating a $4.4 billion windfall for MGM via its stakes in MGP.
As a result, MGM has $4.7 one thousand million inwards cash and hard currency equivalents as of the oddment of 2021 — sound for one of the strongest equilibrium sheets in the gaming industry.
For its part, IAC took a 12 percent stake, and so precious at $1 billion, in MGM Resorts inward August 2020. As a per centum of MGM shares outstanding, IAC is by far the casino operator’s largest shareholder. That investiture is paying turned handsomely for Diller’s company, as the gaming company’s shares resided around $28 when the investment funds was announced.
IAC’s investiture inward MGM is seen as an endorsement of BetMGM and online gaming, with some analysts expecting the partnership to generate more bombilate this year.
“Following the (Corvex) transaction, IAC testament possess more or less 63.5 gazillion shares, or 14.4 percent of the company’s (MGM) outstanding usual stock,” according to the statement.
MGM Buyback Bonanza Continues
MGM’s parting of the apportion buy from Corvex is part of the company’s $3 1000000000 repurchase program — ane of the industry’s largest and most active — proclaimed inwards Feb 2020, signification there’s $636.7 gazillion left hand on that program.
“With this purchase, we have got now bought backward more or less 11.5 percent of our prominent shares, showing our continued trust in MGM stock,” said MGM CFO and Treasurer Jonathan Halkyard inward the statement.
The dealings is scheduled to get back on Feb. 16. As of Feb. 12, the Bellagio operator has 444.8 million shares outstanding.