MGM Scraps Planned $750-Million Sale of Stock

Metro-Goldwyn-Mayer Inc., owner of one of the world’s largest film libraries, said it scrapped plans to sell $750 million of its common stock after the shares fell 27% in the last month.

MGM instead will make a rights offering to its shareholders to buy common shares for $14.50 each, which would result in about $720 million in proceeds. Tracinda Corp., the investment company owned by billionaire Kirk Kerkorian and MGM’s largest investor, will exercise all of its rights and is willing to buy all shares not bought by other investors.

The move comes about a month after MGM said it would sell the new common shares and use some of the proceeds to reduce debt. MGM had been presenting the offering to investors, who had fully subscribed to it before Tuesday’s cancellation.

Shares of the Santa Monica-based company fell 13 cents Tuesday, closing at $15.50 on the New York Stock Exchange. The announcement was made after the close of U.S. markets. MGM stock had hit a 52-week high of $22 in mid-July.