Thaindian News

March 24 (THAINDIAN NEWS) Time Warner, Lions Gate Entertainment, and billionaire Len Blavatnik’s Access Industries all have placed bids of $1.2 billion to $1.5 billion on the movie studio known as Metro Golden Mayer, or MGM. According to sources Time Warner has put up the highest bid, and is, at this time, the most likely to obtain ownership of the huge company.

Metro Goldwyn Mayer, which is in financial trouble and has a $3.7 billion debt was hoping for much higher bids of at least $2 billion. In 2004, Time Warner was in the bidding for MGM, owned by Kirk Kerkorian, and Sony had bid $5 billion cash at that time. This was just after Sony had released “Spiderman 2″ but they were unable to complete the deal at that time, so Time Warner stepped in with a bid. Now many of MGM’s debt stems from a buyout which occurred in 2005 by a group which was made up of four private equity firms, Providence Equity Partners, TPG, Quadrangle Group and DLJ Merchant Banking Partners, a unit of Credit Suisse — and media companies Sony Corp and Comcast Corp. After the huge $5 billion cash bid by Sony in 2004 unfortunately, the buyout was for only $2.85 billion.

Metro Goldwyn Mayer studio released a statement on Monday which said they had received a number of bids and would be reviewing them over the next few weeks. The original deadline for the second round of bids was Friday, but MGM extended it since Time Warner had not yet bid at that time. MGM also stated that they expect to work with their lenders to extend the forbearance period on their bank debt. That time is up on March 31. MGM also “expects to seek a forbearance agreement for its revolving line of credit, for which a payment is due April 8.”