MGM Mirage jumps after board OKs stock buyback

MGM Mirage said earlier it repurchased about 1.3 million shares in the quarter to date under a plan approved in December, leaving about 1.4 million shares left under that authorization.

Together, the approximately 21.4 million shares represent more than 7 percent of MGM Mirage's diluted shares outstanding.

Should MGM repurchase all the stock, it would increase the equity stakes of major shareholders Tracinda Corp. and Dubai World, which currently own 53.4 percent and 9.3 percent, respectively, BMO Capital Markets analyst Jeffrey Logsdon said in a note.

He maintained his "Outperform" rating and $66 price target on the stock.

"MGM management clearly believes that the long-term value of its operations and assets are worth significantly more that the present value of its publicly traded equity, after calculating in the expected returns from its various development and capital projects that will come on in the next few years," Logsdon wrote in a note.

Joseph Greff of Bear Stearns said the decision reflects the company's strong balance sheet and recent weakness in the stock.

"We continue to maintain our 'Outperform' rating given what we see as value in the company looking beyond the current year, low expectations for its Las Vegas properties and Macau joint venture, and likely progress with City Center financing (over the next three months)," he wrote in a note, referring to the company's Las Vegas hotel, casino and residential development scheduled to open in late 2009.

Shares of MGM Mirage have traded between $47.60 and $100.50 over the past 52 weeks, and were up $1.41, or 2.8 percent, to $51.86 in midday trading.