Struggling movie studio Metro-Goldwyn-Mayer Inc (MGM) is looking for a buyer.
The home of the James Bond and Pink Panther franchises said on Friday it had begun to explore strategic options including “a potential sale of the company.”
In a statement, MGM also said its lenders have agreed to grant the company another respite until Jan. 31 from interest payments on nearly US$4 billion in debt.
The decision, reversing its refusal to sell a year ago, came during a conference call on Friday between restructuring expert Stephen Cooper, now MGM’s vice chairman, and the 140 lenders owed some US$3.7 billion in bonds maturing in mid-2012, according to a person close to the situation.
The person was not authorized to speak publicly and spoke on condition of anonymity.
‘ROCKY’
The lenders agreed to seek outside investors for a new partnership, investment or sale of part or all of the company. Its most valuable asset is its library of 4,000 movie and TV-show titles including Rocky and Dances With Wolves. It also owns subsidiary United Artists, headed by Tom Cruise, whose film Valkyrie grossed a respectable US$200 million worldwide after its release last year.
However, the company has fallen on hard times and the home video market has shrunk.
MGM’s latest release, a remake of the 1980 musical Fame, was panned by critics and quickly vanished from most theaters after its Sept. 25 release, making US$42 million worldwide to date.
Financial adviser Moelis & Co is expected to send out nondisclosure agreements and detailed financial information to interested parties by early next week, the person said.
Potential buyers include Time Warner Inc, the parent of the Warner Bros studio, and News Corp, home of 20th Century Fox.
HALF OF ‘THE HOBBIT’
On Thursday, with rumors swirling of its potential sale, Lions Gate Entertainment Corp vice chairman Michael Burns also said his company was interested in taking a look.
“They have fantastic franchises like James Bond, they have half of The Hobbit. Of course it’s interesting to us,” Burns told CNBC’s Fast Money.
Although MGM had the cash on hand to make the interest payments, pushing back the interest payments allows it to complete three movies it has in the pipeline for next year: Hot Tub Time Machine, Red Dawn and The Zookeeper, the person said.
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