MGM Resorts International and IAC on Monday said they each will purchase 4.5m shares of MGM Resorts’ common stock from Corvex Management LP at $45 per share.
MGM Resorts and IAC said they will spend $202.5m each on this purchase, for a total aggregate amount of $405m.
Following the transaction, funds associated with Corvex will continue to own approximately 6.67m shares, or 1.5% of MGM Resorts’ outstanding common stock.
IAC added it will own approximately 63.5m shares, or 14.4% of MGM Resorts’ outstanding common stock.
The parties said the purchases are expected to settle by February 16.
For MGM Resorts, the purchase will be made pursuant to the terms of the company’s February 2020, $3bn stock repurchase program, of which $636.7m will remain following the transaction.
As of Feb. 12, 2022, there were approximately 444.8m shares of MGM Resorts’ common stock outstanding, the company noted.
“Today’s announcement is a testament to the confidence we have in the long-term trajectory of our business and reflects the commitment we have to our capital allocation strategy, which includes returning cash to shareholders and maintaining a strong balance sheet,” Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts International, said in a statement. “With this purchase, we have now bought back approximately 11.5% of our outstanding shares, showing our continued confidence in MGM stock.”
Keith Meister, Managing Partner and Chief Investment Officer, Corvex Management, added: “I am pleased by the transformative transactions the company has undertaken since I joined the board in 2019. I look forward to continuing to serve as a board member.”
Paul J. Salem, Chairman of the Board, MGM Resorts, said Meister “shares our strategic vision for MGM Resorts to be the world’s premier gaming entertainment company, and we look forward to having him continue to serve as a valuable member of our board.”
Joey Levin, CEO of IAC, chimed in: “IAC is grateful to be an MGM Resorts shareholder, and happy for this opportunity to increase our ownership.”
MGM Resorts International is an S&P 500 global entertainment company with national and international locations featuring hotels and casinos, meetings and conference spaces, live and theatrical entertainment experiences, and an array of restaurant, nightlife and retail offerings. The MGM Resorts portfolio encompasses 31 unique hotel and gaming destinations globally, including some of the most recognizable resort brands in the industry. The company’s 50/50 venture, BetMGM, offers US sports betting and online gaming through brands including BetMGM and partypoker. The company said it currently is pursuing targeted expansion in Asia through the integrated resort opportunity in Japan.
IAC describes itself as a builder of 11 public companies, including Angi, Dotdash Meredith and Care.com, among many others ranging from early stage to established businesses. IAC is headquartered in New York City with business locations worldwide.
