MGM might stand alone, Access drops out of bidding
Access Industries, Russian billionaire Len Blavatnik's holding company, has dropped out of the auction for Metro-Goldwyn-Mayer as the studio's creditors meet with Hollywood experts to conduct due diligence on a standalone plan, sources familiar with the matter said, reports Reuters
The lenders' steering committee, led by JPMorgan Chase & Co, Highland Capital Management and Anchorage Advisors, are consulting several Hollywood experts for advice on their plan, and have met with former News Corp President Peter Chernin, among others, one of the sources said.
Representatives of the committee have also had talks with executives at Spyglass Entertainment and Liberty Media Corp's Overture Films, the source said.
The idea of selling MGM, which began exploring options in November, is on hold after bids for the studio were considered to be too low, sources said. A standalone plan, which involves filing for a pre-packaged bankruptcy, is now being studied more carefully.
That plan could involve $1 billion in capital, including $500 million in new equity and a mandate to make anywhere between four to 10 movies a year. The details of the plan could change, depending on how the due diligence process goes, the sources said this week.
Former Hollywood executives are offering advice, the sources said. Some are also offering to run the studio, one of the sources said
Time Warner Inc, which put in a $1.5 billion bid for MGM in March, remains interested in buying the studio, sources said.
Lions Gate Entertainment, which had also bid for the studio, withdrew its offer after MGM told all the bidders that their offers were too low.
Access Industries and Qualia Capital had offered an equity infusion and help with restructuring the company's $3.7 billion of debt, sources previously told Reuters.
MGM's creditors have waived interest payments since September and are expected to extend the current forbearance of $250 million, which expires on May 15, sources said.
MGM, home to more than 4,000 film titles, said in November it was considering selling the company. But as the auction progressed, buyer interest in the company dwindled.
Despite a film library that includes the James Bond and Pink Panther franchises, MGM has been struggling to create new hits. It is also coping with plunging DVD sales as consumers move to viewing online.
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