Movie studio MGM reportedly on auction block for $7 billion, newspaper says
Tuesday, January 15th 2002, 12:00 am
By: News On 6
LOS ANGELES (AP) _ Metro-Goldwyn-Mayer, one of Hollywood's most venerable movie studios, may be up for sale for $7 billion.
The entertainment company has hired investment banking firm Goldman Sachs to solicit bids that are due this week, sources familiar with the auction told the Los Angeles Times for Tuesday's editions. The buyout price is believed to be $7 billion, sources said, but the studio's Wall Street value is about $5 billion.
Potential suitors include Viacom Inc., the Walt Disney Co., Vivendi Universal, News Corp., and AOL Time Warner Inc. None of the companies is believed to have made a bid for MGM because the asking price is too high, sources said.
Neither MGM Chairman Alex Yemenidjian nor any of the rumored companies commented about a possible buyout Monday.
Most of the major studios are interested in MGM's extensive film library, which includes the James Bond franchise and the ``Pink Panther'' movies. The studio's library has more than 4,100 titles.
MGM is controlled by billionaire Kirk Kerkorian, who first acquired the studio in 1969. He has an 80 percent stake in the company after buying it for a third time in 1996 when he led a $1.3 billion buyout from Credit Lyonnais. The French bank auctioned off MGM after taking over the studio in 1992 from Italian financier Giancarlo Parretti, who is under indictment for allegedly acquiring the company through false transactions.
Since taking over MGM, Kerkorian has purchased the Mirage Resort hotels in Las Vegas; Orion Pictures and the film library of Polygram Pictures; and a 20 percent stake in four national cable channels that include Bravo and American Movie Classics.
Kerkorian and his ex-wife, former tennis pro Lisa Bonder Kerkorian, are currently embroiled in a child support dispute. Bonder Kerkorian, who had a monthlong marriage and 10-year romantic relationship with the casino mogul, is seeking $320,000 a month to support their 3-year-old daughter.
Kerkorian is seeking at least $30 a share for the company, sources said.