Entertainment and hospitality giant MGM Resorts International is launching a new $2 billion share repurchase program, the company announced on Wednesday. The plan has been authorized by the group’s Board of Directors.
“We remain committed to our capital allocation strategy and continue to believe that returning cash to shareholders is a highly productive use of our capital,” said Jonathan Halkyard, CFO of MGM Resorts. “We’re pleased that our Board has authorized a new share repurchase program as we believe there is tremendous value in our shares at current levels.”
Pursuant to the terms of a $3 billion repurchase plan authorized in February 2020, the company has purchased 60 million shares, representing about $2.5 billion. As of March 2022, the company has $525.6 million remaining under that repurchase plan.
According to a press statement from the company, MGM intends to utilize the remaining capacity under the 2020 repurchase plan prior to effecting any repurchases under the newly announced $2 billion program.
The new stock repurchase program has been designed “to return value to the company’s shareholders,” MGM explains. Under the scheme, the company may repurchase shares “from time to time” in the open market or in privately negotiated agreements.
Additionally, repurchases of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the company might otherwise be precluded from doing so under insider trading laws.
“The timing, volume and nature of stock repurchases will be at the sole discretion of management, dependent on market conditions, applicable securities laws, and other factors, and may be suspended or discontinued at any time,” the gaming giant announced.
Earlier this week, MGM Resorts International and BetMGM, the company’s sports betting joint venture with Entain, announced a unified commitment to responsible gaming. The businesses will be strengthening their initiatives in this field.
MGM and BetMGM are set to provide the most comprehensive tools available to both in-person and online gaming customers to make responsible, informed decisions. The announcement comes as MGM Resorts and BetMGM join the National Council on Problem Gambling in promoting Problem Gambling Awareness Month throughout March.
Last month, the gaming heavyweight shared its financial report for 2021. The company posted consolidated net revenues of $9.7 billion for FY21, an increase of 88% over the prior year, and net income attributable to the business of $1.3 billion, compared to a $1 billion net loss in 2020. It also posted consolidated Adjusted EBITDAR of $2.4 billion in the period.
The full-year achievements come on the back of a record fourth quarter, in which the company posted consolidated net revenues of $3.1 billion, an increase of 105% compared to the prior-year quarter, which was negatively affected by temporary closures and restrictions no longer in place.