MGM Buying Back $2 Billion of Its Shares
MGM Resorts International plans to buy back $2 billion of its shares.
Coming off the completion of a $1 billion repurchase announced last September, the new round of buy-backs equal about 10 percent of the company’s current market value. They come as the Las Vegas-based gaming giant is enjoying soaring profits from some $6 billion in investments in new and remodeled casinos and hotels in the U.S. and Macau, a cycle set for completion later this year with the opening of a $950 million resort in western Massachusetts.
MGM expects those projects to boost cash flows by as much as 39 percent to $3.9 billion by 2020 on revenues forecasted to hit $14.5 billion.
The company said it plans to spend about $2.1 billion in maintenance capex over the next three years, including upgrades to The Mirage and Bellagio on the Las Vegas Strip, which will leave it with a projected total of $5 billion in free cash flow for share repurchases and dividends, debt reduction, acquisitions and expansion into new markets, notably Japan.