Kerkorian to Place His Holdings in New Firm

Kirk Kerkorian, majority shareholder of MGM/UA Entertainment Co. and MGM Grand Hotels Inc., said Tuesday that he has picked Los Angeles lawyer Stephen D. Silbert to head a new holding company in which the financier plans to consolidate all of his business interests.

The announcement came at a time when the publicly traded MGM movie and gambling concerns say they have been approached by potential buyers for all or part of their assets.

Silbert, 42, who has been principal legal adviser to the 68-year-old Kerkorian for some years, “is expected to have a major role” in the financier’s “present and future business enterprises” and will become a director of both MGM firms, according to the announcement.

In answer to a question, Silbert said that Tracinda Corp., the private investment firm through which Kerkorian holds most of his stock in the MGM firms, will remain intact.

Asked what function the new holding company will have beyond what has existed before, Silbert said that Kerkorian “will have to decide.” The name of the new company was not given.

Tracinda has been headed since 1982 by Fred Benninger, 68, a longtime Kerkorian aide who has been an MGM director since 1969, when the financier took control of Metro-Goldwyn-Mayer Inc., the predecessor of both firms.

Silbert, who has been a senior partner of the Wyman, Bautzer, Rothman, Kuchel & Silbert law firm here, said he will remain “of counsel” to the firm.

Another Wyman, Bautzer senior partner, Frank Rothman, was picked by Kerkorian in April, 1982, for his present post as chairman and chief executive of MGM/UA Entertainment.

“This is a very exciting period in Kirk’s business life,” Silbert said Tuesday in a prepared statement. “Major transactions we’ve announced are under consideration at each of our companies, which will be new challenges for both of us.”

MGM/UA said last week that it is considering the sale to its shareholders of its United Artists movie subsidiary for $10 a share, or $500 million. It said Kerkorian intended to buy “at least” his pro-rata share of 50%. The company said it is consulting its investment banker about selling MGM/UA minus the United Artists assets.

In early June, Kerkorian proposed buying the 30% of MGM Grand Hotels stock that he doesn’t already own for $18 a share, or $126 million. A month later, he reported an approach by a prospective buyer for the firm’s two Nevada gambling resorts. He said he intended to proceed with his offer but would “seriously reconsider” in event of a deal “significantly” more advantageous to all the stockholders.