Consortium Led by Sony Corporation of America, Providence Equity
Partners, Texas Pacific Group, Comcast Corporation and DLJ Merchant
Banking Partners Enters Into Definitive Agreement to Acquire
Metro-Goldwyn-Mayer NEW YORK and LOS ANGELES, Sept. 23
/PRNewswire-FirstCall/ -- A consortium led by Sony Corporation of
America and its equity partners Providence Equity Partners, Texas
Pacific Group, Comcast Corporation and DLJ Merchant Banking
Partners, together with Metro-Goldwyn-Mayer Inc. (NYSE:MGM),
announced today that they have entered into a definitive agreement
under which the investor group will acquire MGM for $12.00 in cash
per MGM share, plus the assumption of MGM's approximately $2.0
billion in debt. The investor group has committed a total of $1.6
billion in equity financing to acquire MGM as follows: Providence
Equity Partners -- $525 million, Texas Pacific Group -- $350
million, Sony Corporation of America -- $300 million, Comcast
Corporation -- $300 million, and DLJ Merchant Banking Partners --
$125 million. JP Morgan Chase has committed to lead a bank
syndicate to provide up to $4.25 billion in senior debt financing
together with Credit Suisse First Boston. From today until closing,
MGM will continue as an active producer of film and television
projects, and will continue to greenlight projects under the MGM
and United Artists banners in the ordinary course of business
consistent with its current business plan. Following the closing of
the transaction, MGM will continue to operate under the
Metro-Goldwyn-Mayer name as a private company headquartered in Los
Angeles. Also following the close, Sony Pictures Entertainment will
co-finance and produce new motion pictures with MGM as well as
distribute MGM's existing film and television content through Sony
Pictures' global distribution channels. As previously announced,
Comcast, Sony Pictures Entertainment and the equity partners in the
MGM transaction have agreed to a broad programming and distribution
arrangement that will allow for the distribution of Sony Pictures'
and MGM content on Comcast's video on demand platform, and for the
creation of a joint venture, to be managed by Comcast, establishing
new cable channels featuring Sony Pictures and MGM content. "We are
delighted to be able to make this announcement today together with
our partners," said Sir Howard Stringer, Chairman and Chief
Executive Officer, Sony Corporation of America. "We all look
forward to preserving and enhancing the legendary franchise that is
MGM, and to ensuring that its extraordinary content continues to be
enjoyed by people around the world." "This is a compelling
strategic transaction that will give MGM the ideal partners to
build on its unique legacy," said Alex Yemenidjian, Chairman and
CEO of MGM. "This transaction will deliver the full value of MGM to
our shareholders, while creating significant value-creation
opportunities for the new owners and expanded options for consumers
to enjoy MGM's content." "This transaction presents a unique
opportunity to enhance the value of MGM's exceptional film library
through the world-class distribution capabilities of both Sony and
Comcast," said Jonathan Nelson, Chief Executive Officer of
Providence Equity Partners Inc. "We look forward to working closely
with our fellow investors to increase the value of MGM's content in
the years ahead." "We are delighted to join with such a powerful
group of partners in this acquisition of a truly legendary
entertainment company," said Kelvin Davis, partner, Texas Pacific
Group. "We're excited about the opportunity to build upon the
unique film franchises which MGM has developed over its
distinguished history." Comcast Chairman and Chief Executive
Officer Brian L. Roberts said, "This is a terrific partnership. We
are delighted to be working with Sony and the other partners to
substantially expand the content available to our customers, and
our direct investment further underscores our excitement over this
opportunity." "We believe this landmark transaction -- partnering
with two great global entertainment companies -- is an exciting
opportunity for both our partners and investors," said Thompson
Dean, Managing Partner of DLJ Merchant Banking Partners. The
transaction, which has been approved by the Board of Directors of
MGM, is subject to the approval of MGM shareholders, various
regulatory approvals and customary closing conditions. Tracinda
Corporation and 250 Rodeo Inc., MGM's principal shareholders, have
entered into a Voting and Support Agreement agreeing to vote their
shares in favor of the proposed merger. The merger agreement
contains no financing contingency. The transaction is expected to
close in mid-2005. Employees of MGM and its subsidiaries will have
the opportunity to be considered for available positions that may
arise as a result of the transaction. JP Morgan Chase is acting as
the lead arranger for all of the debt financing, and Credit Suisse
First Boston is a co-underwriter. Credit Suisse First Boston, JP
Morgan Chase and Citigroup are acting as financial advisors to the
investor group. Goldman Sachs, Morgan Stanley and Banc of America
Securities are acting as financial advisors to MGM. Allen &
Company, Inc. and The Blackstone Group L.P. are acting as advisors
to Sony Corporation of America. About Sony Corporation of America
Sony Corporation of America, based in New York City, is the U.S.
subsidiary of Sony Corporation, headquartered in Tokyo. Sony is a
leading manufacturer of audio, video, communications, and
information technology products for the consumer and professional
markets. Its music, motion picture, television, computer
entertainment, and online businesses make Sony one of the most
comprehensive entertainment companies in the world. Sony's
principal U.S. businesses include Sony Electronics Inc., Sony
Pictures Entertainment, Sony Computer Entertainment America Inc.,
and a 50% interest in Sony BMG Music Entertainment, one of the
largest recorded music companies in the world. Sony recorded
consolidated annual sales of over $72 billion for the fiscal year
ended March 31, 2004, and it employs 162,000 people worldwide.
Sony's consolidated sales in the U.S. for the fiscal year ended
March 31, 2004 were $20.4 billion. For more information see
http://www.sony.com/. About Metro-Goldwyn-Mayer Inc.
Metro-Goldwyn-Mayer Inc. (NYSE:MGM), through its
Metro-Goldwyn-Mayer Studios Inc. subsidiary, is actively engaged in
the worldwide production and distribution of motion pictures,
television programming, home video, interactive media, music and
licensed merchandise. The company owns the world's largest library
of modern films, comprising about 4,000 titles. Operating units
include MGM Pictures, United Artists, MGM Television Entertainment,
MGM Networks, MGM Distribution Co., MGM Worldwide Television
Distribution, MGM Home Entertainment, MGM On Stage, MGM Consumer
Products, MGM Music, MGM Interactive and MGM Direct. In addition,
MGM has ownership interests in international TV channels reaching
nearly 110 countries. For more information, visit
http://www.mgm.com/. About Providence Equity Partners Inc.
Providence Equity Partners Inc. is one of the world's leading
private investment firms specializing in equity investments in
media and communications companies. The principals of Providence
Equity manage funds with over $9 billion in equity commitments and
have invested in more than 70 companies operating in over 20
countries since the firm's inception in 1991. Current and previous
areas of investment include cable television content and
distribution, wireless and wireline telephony, publishing, radio
and television broadcasting and other media and communications
sectors. Significant investments include VoiceStream Wireless,
Warner Music Group, PanAmSat, AT&T Canada, eircom plc, Casema,
Kabel Deutschland, Language Line, F&W Publications,
ProSiebenSat.1, and Bresnan Broadband Holdings. The firm has
offices in Providence, New York and London. Visit
http://www.provequity.com/ for additional information About Texas
Pacific Group Texas Pacific Group, founded in 1993 and based in
Fort Worth, Texas, San Francisco and London, is one of the world's
leading private investment firms managing over $13 billion in
assets. TPG looks to invest in world-class franchises across a
range of industries, including significant investments in branded
consumer franchises (Burger King, Del Monte, Ducati), leading
retailers (Petco, J.Crew, Debenhams - UK), healthcare (Oxford
Health Plans, Quintiles Transnational), technology companies (ON
Semiconductor, MEMC, Seagate), and airlines (Continental, America
West), among others. About Comcast Comcast Corporation
(http://www.comcast.com/) is principally involved in the
development, management and operation of broadband cable networks,
and in the provision of programming content. The Company is the
largest provider of cable and broadband services in the United
States, serving more than 21 million cable television customers and
more than 6 million high-speed Internet customers. The Company's
content businesses include majority ownership of Comcast Spectacor,
Comcast SportsNet, E! Entertainment Television, Style Network,
G4techTV, The Golf Channel, International Channel and Outdoor Life
Network. Comcast Class A common stock and Class A Special common
stock trade on The Nasdaq Stock Market under the symbols CMCSA and
CMCSK, respectively. About DLJ Merchant Banking Partners DLJ
Merchant Banking Partners (DLJMB) is a leading private equity
investor that has a 19-year record of investing in leveraged
buyouts and related transactions across a broad range of
industries. DLJMB, with offices in New York, London, Houston and
Buenos Aires, is part of Credit Suisse First Boston's Alternative
Capital Division (ACD), which is one of the largest alternative
asset managers in the world with more than $36 billion of assets
under management. ACD is comprised of $20 billion of private equity
assets under management across a diverse family of funds, including
leveraged buyout funds, mezzanine funds, real estate funds, venture
capital funds, fund of funds and secondary funds, as well as more
than $16 billion of assets under management through its hedge fund
(both direct and fund of funds), leveraged loan and CDO businesses.
FORWARD-LOOKING STATEMENTS This document may contain statements
that constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical fact are statements
that could be deemed forward-looking statements. Such forward-
looking statements reflect Sony Corporation's ("Sony"), Comcast
Corporation ("Comcast") and Metro-Goldwyn-Mayer Inc.'s ("MGM")
current expectations and beliefs and are subject to a number of
risks, uncertainties, assumptions and other factors that could
cause actual results to differ materially from those described in
the forward-looking statements. For example, such risks,
uncertainties, assumptions and other factors include, without
limitation, the possibility that: (1) the consortium and MGM may be
unable to obtain the required stockholder or regulatory approvals;
(2) problems may arise in successfully integrating the businesses;
(3) the acquisition may involve unexpected costs; (4) the
consortium may be unable to achieve cost-cutting synergies; (5) the
businesses may suffer as a result of uncertainty surrounding the
acquisition; and (6) the new company may be subject to future
regulatory or legislative action. For a further discussion of these
and other risks, uncertainties, assumptions and other factors, see
Sony's, Comcast's and MGM's filings with the Securities and
Exchange Commission. None of Sony, Comcast and MGM undertakes any
duty to update forward-looking statements. In connection with the
proposed transaction, MGM will file a proxy statement and other
materials with the Securities and Exchange Commission. INVESTORS
ARE URGED TO READ THE PROXY STATEMENT AND THESE MATERIALS WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
MGM and its officers and directors may be deemed to be participants
in the solicitation of proxies with respect to the proposed
transaction. Information regarding such individuals is included in
MGM's proxy statements and Annual Reports on Form 10K previously
filed with the Securities and Exchange Commission and will be
included in the proxy statement relating to the proposed merger
when it becomes available. Investors may obtain a free copy of the
proxy statements and other relevant documents when they become
available as well as other material filed with the Securities and
Exchange Commission concerning MGM and these individuals at the
Securities and Exchange Commission's website at
http://www.sec.gov/. These materials and other documents may also
be obtained for free from: MGM at Metro-Goldwyn-Mayer, 10250
Constellation Boulevard, Los Angeles, California 90067, Attn:
Investor Relations. DATASOURCE: Sony Corporation of America
CONTACT: Media, Ann Morfogen, +1-212-833-6873, or Media, Mack
Araki, +1-212-833-6821, or Investors, Justin Hill, +1-212-833-6820,
all of Sony Corporation of America; or Susan Tick, Sony Pictures
Entertainment, +1-310-244-6777; or Media, D'Arcy Rudnay,
+1-215-981-8582, or Investors, Marlene Dooner, +1-215-981-7392,
both of Comcast Corporation; or Andrew Cole, Providence Equity
Partners Inc., +1-212-687-8080; or Owen Blicksilver, Texas Pacific
Group, +1-516-742-5950; or Victoria Harmon, DLJ Merchant Banking
Partners, +1-212-325-6914; or Investors, Joe Fitzgerald,
+1-310-449-3660, or Janet Janjigian, +1-310-449-3294, or Media,
George Sard, or Stephanie Pillersdorf, +1-212-687-8080, all of
Metro-Goldwyn-Mayer Inc. Web site: http://www.sony.com/
http://www.comcast.com/ http://www.provequity.com/
http://www.mgm.com/
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