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MGM aims to launch IPO before 'Skyfall' opens in theatres

11-Sep-2012 • Bond News

As MI6 reported back in July, newly reinvigorated studio MGM, which suffered terrible financial problems in recent years until they swapped debt for ownership and got out of bankruptcy, have been planning steps for an initial public offering (IPO).

Now that timeline has been ramped up to try and get an IPO launched before the new James Bond film "Skyfall" opens on October 26th in the UK (November 9th in the US).

A stock market floatation would raise further funds to kick start more movie production. Currently, most of MGM's output has been done in partnerships with other studios.

There’s an expectation of what the box office is going to be,” Jay Ritter, a University of Florida finance professor who studies IPOs, said in an interview to Business Week. “By going out before the release, the sellers can get what’s expected and have investors deal with what it actually turns out to be.”

Business Week also pointed out how MGM will be able to pull this off so quickly: "MGM submitted its preliminary registration under the Jumpstart Our Business Startups Act, which lets companies with annual sales of less than $1 billion file confidentially with regulators. The law, enacted in April, requires the filings be made public 21 days before starting a road show -- a process usually lasting about two weeks -- and completing a sale. The JOBS Act was intended to make IPOs simpler and cheaper for startups and small businesses by reducing the time and paperwork, according to a White House statement issued when the bill was signed in April. Companies that have used its provisions include the U.K. soccer team Manchester United Ltd., which sold a 10 percent stake on Aug. 9 to raise $233.3 million after pitching itself as an “emerging growth company.”

“The confidential filing under the JOBS Act was designed specifically for emerging growth companies,” said Sam Hamadeh, chief executive officer of PrivCo Media LLC, a New York firm that tracks data on closely held companies. “It was designed for much smaller companies than MGM.”

Pricing may determine whether MGM moves forward with the IPO or weighs any offers, said a second person, who sought anonymity because the process is private.

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