MGM to Delay Shareholders Vote on Merger

MGM UA Entertainment is postponing its planned Jan. 21 special stockholders meeting approval of a merger into Turner Broadcasting System, a spokesman for MGM UA controlling shareholder Kirk Kerkorian confirmed Thursday.

Coincidentally, MGM’s shares fell $1.375 to close at $22.50 Thursday in New York Stock Exchange composite trading.

MGM UA itself made no immediate comment or announcement. However, Kerkorian spokesman Stephen D. Silbert said the postponement resulted from a delay in getting approval of its proxy material from the Securities and Exchange Commission during the holiday period. The preliminary proxy was filed two weeks ago.

MGM UA’s meeting will be set to permit a required 21-day meeting notice to shareholders after the proxy is cleared by the SEC, Silbert said.

The meeting’s outcome is a foregone conclusion, according to a preliminary copy of the proxy filed with the SEC. That is because Kerkorian has given Turner Broadcasting proxies to vote all of his shares, and “TBS will vote all such shares for adoption of the merger agreement, thereby assuring stockholder approval,” it states.

The same document, filed Dec. 19 and made a part of Turner Broadcasting’s own amended registration statement, also discloses that the Turner-MGM deal has limited escape hatches for the parties.

In part, it says the $1.4-billion merger agreement may be terminated by the parties “under limited circumstances” prior to closing of the deal and “by either party if the (closing) shall not have occurred on or prior to Feb. 28, 1986.”

Despite recurrent Wall Street reports of financing problems, MGM UA and Turner spokesmen have said recently that they expect investment banker Drexel Burnham Lambert to complete the arrangements. Turner’s amended registration said it intends to raise $125 million more on sale of securities than originally planned.