Lions Gate Entertainment Corp. (LGF) and Metro-Goldwyn-Mayer
have been in merger discussions, the Los Angeles Times reported
Thursday.
If successful, the talks could result in a powerful independent
studio with a library of thousands of movies and television shows
that would be run by Lions Gate's management.
People with knowledge of the talks said that Lions Gate
executives were pursuing the merger to fight off a takeover by
dissident shareholder Carl Ichan, who owns almost one-third of its
shares and has threatened a proxy war. Lions Gate would need
Icahn's approval for the merger.
MGM is seeking to avoid bankruptcy as it deals with $4 billion
in debt. The film studio's debt holders have been encouraging
reorganization through a pre-packaged bankruptcy. Creditors have
also been in talks with Spyglass Entertainment, a film finance and
production company, as well as Summit Entertainment, the studio
behind the successful "Twilight" series, about taking over MGM.
Several high-profile MGM properties, including the James Bond
series of film and a two-film adaptation of "The Hobbit," are
awaiting resolution of the studio's fate before moving forward.
Full story:
http://www.latimes.com/business/la-fi-ct-mgm-20100624,0,3313278.story
-Dow Jones Newswires; 212-416-2900