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MGM update- Bloomberg BusinessWeek

Pipe Dream
Gondor


Mar 31 2010, 8:45am


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MGM update- Bloomberg BusinessWeek Can't Post

Blavatnik’s Access Said to Consider Quitting MGM Studio Auction


March 31 (Bloomberg) -- Billionaire Len Blavatnik’s Access Industries may drop out of the bidding for Metro-Goldwyn-Mayer Inc., a person with knowledge of the situation said.
Access Industries, vying for control of the Los Angeles- based studio with Time Warner Inc. and Qualia Capital, hasn’t received a response to its restructuring proposal from MGM or its creditors, said the person, who asked not to be named because the terms are private.
Blavatnik’s departure would remove a potential source of fresh capital for MGM, which put itself up for sale last year after falling behind on $3.7 billion in debt. Turnaround specialist Stephen Cooper, who joined the studio as vice chairman in August, will ask creditors on April 1 for new funds to restructure debt and keep the company independent, said four people with knowledge of the proposal.
Lenders deemed the current offers too low, a person with knowledge of the deliberations said last week. MGM is seeking to extend a moratorium on interest payments through May 14, people with knowledge of the situation said last week. Creditors were to decide as soon as yesterday whether to grant the forbearance, said two people.
Cooper is part of a three-member Office of the CEO at MGM, along with production Chairman Mary Parent and Chief Financial Officer Bedi Singh. His plan calls for making as many as 12 films a year, according to one of the people, who sought anonymity because the proposal isn’t public.
The executive is seeking as much as $1 billion, including equity to finance operations and funds for movie production, said one of the people.
Time Warner, Qualia
Time Warner has offered $1.5 billion for MGM, a person with knowledge of the auction said last week. The New York-based parent of the Warner Bros. film studio is seeking to purchase MGM, while the others are proposing to recapitalize the company and keep it independent.
New York-based Qualia has increased the cash in its proposal, according to one person. The company, led by Amir Malin and Ken Schapiro, presented a new restructuring offer on March 19 that adds to the $500 million first offered, according to one person familiar with the proposal.
Malin and Schapiro would serve as co-chief executives of MGM for a limited period, cutting overhead and producing fewer movies, the person said.
‘Hot Tub’
Access Industries, based in New York, has said it would provide an undisclosed amount of cash for new production and reduce MGM’s debt, a person with knowledge of the plans said on March 24.
Susie Arons, an outside spokeswoman for MGM, declined to comment.
MGM released one film in 2009 and “Hot Tub Time Machine” is its sole release this year. The movie cost $36 million to make, according to researcher Box Office Mojo, and grossed $15.6 million in ticket sales its first weekend in U.S. and Canadian theaters.

http://www.businessweek.com/...-studio-auction.html

Subject User Time
MGM update- Bloomberg BusinessWeek Pipe Dream Send a private message to Pipe Dream Mar 31 2010, 8:45am
    So... macfalk Send a private message to macfalk Mar 31 2010, 9:55am
        But if they get the support of their creditors this could go on and on... Kangi Ska Send a private message to Kangi Ska Mar 31 2010, 10:10am
            What a crock huh? Pipe Dream Send a private message to Pipe Dream Mar 31 2010, 9:04pm
    From mcfalk: MGM granted debt extension Altaira Send a private message to Altaira Mar 31 2010, 4:46pm
        So theoretically, we could be waiting until MAY? Ugh. // Tiria Send a private message to Tiria Mar 31 2010, 7:42pm
    Still don't understand why "The Hobbit" needs MGM Puddum Send a private message to Puddum Mar 31 2010, 8:51pm
        MGM owns the distribution rights Arwen's daughter Send a private message to Arwen's daughter Mar 31 2010, 8:54pm
            Pah Puddum Send a private message to Puddum Mar 31 2010, 9:24pm

 
 
 

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