Time Warner will put in $1.5 bn bid for MGM: Report

Time Warner will put in $1.5 bn bid for MGM: Report
PTI
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First Published: Tue, Mar 23 2010. 04 13 PM IST
Updated: Tue, Mar 23 2010. 04 13 PM IST
London: Entertainment conglomerate Time Warner will put in a bid of $1.5 billion for the debt-laden hollywood studio Metro-Goldwyn-Mayer, says a media report.
“Time Warner will bid $1.5 billion in what is expected to be an all-cash offer for the assets of Metro-Goldwyn-Mayer (MGM),” the Financial Times reported.
The owner of CNN and Time Inc magazine group controls Hollywood’s largest film library and is seen placed well to generate strong returns from MGM’s assets through its distribution network and relationships with pay TV companies.
The report said that MGM, saddled with $3.7 billion in debt, initially attracted attention across Hollywood and beyond, with companies including News Corp, Liberty Media and AT&T seen as interested.
But by last Friday’s deadline, only three remained, it added.
According to the publication, MGM said “the number of bids” had been received and that it would review them over the next few weeks. MGM has not ruled out operating as an independent company.
The bids were less than MGM’s expectations, which had initially hoped for offers of at least $2 billion, the FT said.
The studio has struggled to keep afloat of looming debt obligations as it suffered an industry-wide slump in DVD sales. In spite of that, the studio’s Bond catalogue — rights to make future Bond films and its development of a film version of The Hobbit — attracted interest from potential buyers.
Time Warner’s strong balance sheet, with close to $5 billion in cash and equivalents at the end of 2009, has also made it the front runner in the auction, the report said citing people familiar with the discussions.
MGM also said it expects to work with lenders to extend the forbearance period on its bank debt, which is ending on 31 March, and that it expects to seek a forbearance agreement for its revolving line of credit, for which a payment is due 8 April, the daily said.
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First Published: Tue, Mar 23 2010. 04 13 PM IST