MGM Mulling Additional Strategic Offers, Says CEO29 Jun, 2004 By: Erik Gruenwedel
As expected, venerable film studio Metro-Goldwyn-Mayer at its annual shareholders' meeting today in Beverly Hills, Calif., reiterated the existence of potential suitors to the 80-year-old brand without identifying who they are.
Speaking to shareholders, MGM CEO Alex Yemenidjian said rescheduling of the meeting from May 12 to entertain outside interest had produced offers beyond the widely reported exclusive negotiations with Sony Corp.
Yemenidjian declined to field questions on the matter during the meeting.
On Monday, the Los Angeles Times reported that Sony's $5 billion bid, which included $1.5 billion from financial partners Texas Pacific Group, Providence Capital and DLJ Merchant Banking, and $3.5 billion in debt financing from Credit Suisse First Boston, ran aground largely due to Sony's desire to keep the merger (and requisite debt) off its balance sheet in the short term.
A merger between Sony and MGM would see a combined home video business (with Sony's Columbia TriStar Home Entertainment) that, in 2003, would have generated $3.69 billion, for 16.5 percent of the total home video marketplace, according to Video Store Magazine Market Research. It would keep CTHE in its same No. 3 market-share position behind Buena Vista Home Entertainment's 19.6 percent.
A source familiar with the company said interest from Time Warner and, more recently, NBC Universal in MGM's 4,000-plus library of titles, which include the “Pink Panther” and “James Bond” franchises, remained strong despite reports that both senior executives from both companies consider the $5 billion price too high.