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MGM Weighs Special Dividend

March 16, 2004|James Bates | Times Staff Writer

Metro-Goldwyn-Mayer Inc. is considering paying out as much as $2.1 billion to shareholders in a special dividend.

Sources said the company was mulling over giving stockholders $6 to $9 a share. The bulk of the money would go to billionaire Kirk Kerkorian, who controls the Los Angeles studio with 74% of shares.

Executives at MGM, which has eliminated its debt while significantly boosting the cash it is generating, made it clear last year that the firm would share its riches with stockholders if it failed in its bid to buy Vivendi Universal's U.S. entertainment assets. MGM lost out to General Electric Co.

"They've been very verbal about sharing the wealth with their shareholders," said Jeffrey Logsdon, an analyst with Harris Nesbitt Gerard.

At the time, however, MGM executives hinted that some kind of tender offer to acquire MGM shares was more likely than a dividend.

In a statement, MGM Chief Executive Alex Yemenidjian confirmed that the company was considering the one-time distribution but said no final decision had been made.

"As we have indicated in the past, our management remains committed to sharing the company's wealth with our shareholders," he said.

The studio is best known for the James Bond franchise, as well as such films as "Legally Blonde" and "Barbershop." It also has a strong DVD business, leveraging its sizable film and TV library.

MGM shares slipped 9 cents to $16.20 on the New York Stock Exchange. MGM issued its statement after markets closed.

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