MGM MIRAGE (NYSE: MGM - News) announced today that it has commenced an underwritten public offering of 81.0 million shares of its common stock. It is expected that the offering will have gross proceeds of approximately $1 billion. Merrill Lynch & Co., Deutsche Bank Securities, J.P. Morgan, Morgan Stanley and UBS Investment Bank are acting as joint book-running managers for the offering. The underwriters for the offering will have a 30-day option to purchase up to an additional 12.15 million shares of common stock from the Company to cover over-allotments, if any.
Tracinda Corporation, the holder of approximately 53.8% of the Company's common stock has indicated that it intends to purchase from the underwriter approximately 8.1 million of the shares sold in the offering.
The Company plans to use the net proceeds from the offering, together with the net proceeds of a concurrent offering of senior secured notes, to (i) repay not less than $750 million of the outstanding amount under its senior credit facility, (ii) redeem all of the 7.25% senior debentures due 2017 of Mirage Resorts, Incorporated, (iii) purchase all of the Company's 6.0% senior notes due 2009 and all of the 6.50% senior notes due 2009 of Mandalay Resort Group tendered in pending tender offers, and (iv) for general corporate purposes.
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