Access Industries considers backing out of MGM bid
As beleaguered film studio Metro-Goldwyn-Mayer scored a win by convincing creditors to give it more time to find a solution to its financial mess, one of its rescue options hinted that its interest in saving the lion might be fading - reports the NY Post
The debt-ridden studio, whose world-famous logo is a roaring lion, announced yesterday that it had succeeded in getting creditors to give it another six weeks -- till mid-May -- to come up with a way to pay off its nearly $3.7 billion in debt.
But that victory was quickly overshadowed by the threat of another suitor considering dropping out of the hunt for the 86-year-old studio.
According to a person familiar with the matter, billionaire industrialist Len Blavatnik's holding company, Access Industries, is thinking about backing away from its offer for the studio.
This person said that Access, which holds a stake in Warner Music Group, has been "waiting for an opportunity" to discuss its bid with MGM bosses, but has yet to hold those discussions. This person said Access "has indicated" it will drop out if it "doesn't receive clarity soon."
If Blavatnik follows through with his threat, it would mark the second bidder to drop out of the hunt for MGM, and represents an embarrassment for MGM CEO Stephen Cooper, who is part of an executive triumvirate overseeing a sale that has not gone well.
Last week, Lionsgate Entertainment dropped out of the running after its bid, reported to be somewhere between $1.2 billion and $1.4 billion, was deemed unsatisfactory to MGM brass.
The third bidder, media giant Time Warner, is said to have offered $1.5 billion.
Blavatnik's offer has been described as being on a par with Lionsgate's and Time Warner's bids in terms of dollar amount, however as part of his proposal he offered to inject cash into the studio while at the same time lowering its debt.
Even so, the bids submitted during this latest round are well short of what the more than 100 creditors were expecting to get. Many were hoping for $2 billion, which could have made a big dent in MGM's $3.7 billion debt load.
Meanwhile, MGM said yesterday that the extension it got from creditors will enable it to review its options as it looks to make a $200 million interest payment, plus pay $250 million on a line of credit from JPMorgan Chase. The credit line payment was originally due April 8.
The announcement marks the fourth time since October that MGM has gotten forbearance as it tries to come up with a restructuring plan and avoid bankruptcy.
Boasting a 4,000-title library that includes the "James Bond" franchise, MGM's luster has faded as the cash generated from the library wanes.
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