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Background
When the respective petitions were filed, TBS was a Georgia
corporation having its principal place of business in Atlanta,
Georgia, and Tracinda was a Nevada corporation having offices in
Las Vegas, Nevada.
In July and early August 1985, TBS and Tracinda and their
respective owners entered into negotiations, and subsequently
contracts, that changed the ownership of MGM and UA.
At the time of the initial negotiations, Tracinda was an
investment and holding company wholly owned by Kirk Kerkorian
(Kerkorian). Kerkorian directly owned .075 percent of MGM and
indirectly owned 50.066 percent of MGM through Tracinda.
MGM was a publicly held corporation that traded on both the
New York and Pacific stock exchanges. UA was a wholly owned
subsidiary of MGM. TBS, at all material times, was more than 80
percent beneficially owned by R.E. "Ted" Turner.
As a result of the negotiations, the following documents
were executed on August 6, 1985: Agreement and Plan of Merger
between TBS, Merger Sub,2 MGM and UA dated August 6, 1985 (Merger
Agreement); Purchase and Sale Agreement between Tracinda and MGM
(Purchase and Sale Agreement); Company Option Agreement between
TBS and MGM (C-Option); and Option Agreement between Kerkorian,
2Merger Sub was a company incorporated as a transitory
merger subsidiary (TBS Acquisition Corp.) that merged into MGM.
MGM was the corporation that survived the merger.
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