MGM studio says has received several rescue offers
Metro-Goldwyn-Mayer Inc., an iconic Hollywood studio that has fallen on hard times, said Monday it has received several offers from suitors wanting to acquire it or keep it operating as a standalone company.
MGM said it will take several weeks to evaluate the offers, which came after six companies made nonbiding proposals in January.
Not all of the six handed in offers, a person familiar with the process said Monday. The person spoke on condition of anonymity because the offers are meant to be confidential.
It's not clear which companies are still in the running, but those expected to have proposed buying MGM outright were Time Warner Inc., Lions Gate Entertainment Corp., and Len Blavatnik's Access Industries.
Representatives of Time Warner, Lions Gate, and Access declined to comment. The offers to buy the studio had been due on Friday but MGM extended the process until Monday as some bidders appeared to stall for time.
Both News Corp., which owns 20th Century Fox, and private equity firm Qualia Capital LLC had offered earlier to inject cash to keep MGM operating independently while it restructured its debt.
Qualia, formed by former executives of movie distributor Artisan Entertainment, offered to inject at least $500 million, while News didn't specify an amount.
Representatives of News Corp. and Qualia also declined to comment.
MGM is known for its roaring lion and classics such as "The Wizard of Oz," and has been sold several times since its founding in 1924.
The latest sale came at the height of a Hollywood bubble, when Sony Corp., Comcast Corp. and several private equity firms took on $3.7 billion in bank debt and a $250 million credit line to take MGM from a group that included billionaire Kirk Kerkorian for $5 billion in 2005.
Sagging DVD sales and a lack of hits at the box office have diminished the value of the company. All of the offers were expected to fall short of $2 billion.
The studio has been putting off paying interest payments on its bank debt since September, and on Monday it said it hoped to work with lenders to extend that reprieve past March 31, when it was scheduled to resume payments.
MGM also said it is seeking to put off paying back the principal on its credit line beyond April 8, when it is due to JPMorgan Chase & Co. It's not clear how much the company borrowed from the line of credit.
MGM's newest movie, "Hot Tub Time Machine," chronicles four buddies' accidental journey back to their glory days on the ski slopes. It opens this weekend.