MGM / UA Stock on Roller Coaster

Shares of MGM/UA Entertainment, in the midst of a $1-billion acquisition by Turner Broadcasting System, fell $3.375 in trading Friday--apparently as some investors worried about the deal--but then recovered to close at $24.625, down $1.75 from Thursday.

Atlanta-based Turner has agreed to pay $29 a share cash for all of MGM/UA’s shares.

In response to an inquiry from the New York Stock Exchange, both companies said they knew of no reason for the “unusual activity.” A Turner spokesman said the firm still expects to file a registration statement with the Securities and Exchange Commission within two weeks and “still expects the transaction to be completed either by the end of October or the end of November.”

Several financial sources said the action in MGM/UA’s stock Friday was marked by the “dumping” of stock by some arbitrageurs. One source speculated that they were “nervous” because of a “slight weakness in MGM/UA’s stock on Thursday, when it closed down 25 cents.