MGM Enters Second Round of Auction Bids

Published 4 years ago by , Updated February 10th, 2012 at 9:41 am,

mgm logo11 MGM Enters Second Round of Auction Bids

The auction of MGM has entered its second round of bidding, with approximately half a dozen potential buyers being invited back to the table. This news, courtesy of THR, comes a month after we reported that MGM lenders are growing restless with the pace (and low bid offers) of the auction.

MGM is of course facing new ownership and/or restructuring, due to its massive debts.

Second round bidders include Time Warner, Lionsgate, Liberty Media and Summit Entertainment (to name a few). MGM’s financial consultant, Moelis & Co., is trying to get a quality bid on the table this month, as MGM has a big payment due to lenders on March 31st.

To get that ball rolling, March 19th has been set as the deadline for second round bids. However, as the six potential buyers are performing their due diligence on MGM’s books, some insiders close to the buyers side are reporting that the opportunity is looking less and less attractive.  Second round bids are expected to level out at about $1.5 billion (down from $1.7 billion in the previous round).

Said one insider:

“The deeper you dig, the more bad news you get…The numbers just aren’t getting any better.”

MGM has one of the largest film libraries around – unfortunately many of those titles are now considered “old people movies” and beyond the James Bond franchise and a remaining stake in the upcoming film adaptation of The Hobbit, MGM doesn’t have many strong new properties to offer.

the hobbit bond MGM Enters Second Round of Auction Bids

Time Warner would likely benefit the most from the acquisition, as the company already owns a Warner Bros. catalog that includes a lot of  pre-1986 MGM films once acquired by Ted Turner. The other buyers are likely too small (Lionsgate, Summit) or have merger plans that don’t necessarily guarantee MGM success on the financial front.

The studio’s 140+ lenders are now scrambling to secure their positions, should the auction sale prove unsuccessful. Under debt restructuring, MGM equity would be shifted to the lenders.

Where will all this madness leave James Bond and The Hobbit? Hopefully safe under the wings of other studios (WB is already helping out with The Hobbit), but you never know.

We’ll keep you updated.

Source: THR

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TAGS: james bond, the hobbit

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  1. Marvel buy it so that you'll have a cushion just in case Disney starts acting stupid!!!!!!

  2. Marvel Studios buy it so you can do your rated R movies under this banner!!!! Marvel has a lot of Adult material, why throw them away or let other studios incorrectly do them. Buy this studio Marvel!!!!

  3. I wanna make a offer how awsome would that be to have full control of a entire library of films to do what ever u want with

  4. If they would only shoot and release another Bond film and The Hobbit films, they would find themselves in much better waters. Too bad for the Stargate Universe.

  5. It sounds good on paper as the saying goes but with all of MGM's debt they would be better off to wait and see if they couldn't buy the valued pieces if it breaks apart. Create a proto-company that you would feed those projects to then buy the MGM logo's, titles, and distribution network if their is anything and do it that way. Turner would probably be interested in the movie titles and as far as real estate ?? Anybodies guess…

  6. Surely making another Bond movie would get them out of this mess, short term anyway, Bond 23 isnt scheduled to come out till late 2011. Why exactly???

  7. The Hobbit is part of a spin-off to Lord of the Rings and I hope New Line picks up the right to the Hobbit film.

  8. The Hobbit is part of a spin-off to Lord of the Rings and I hope New Line picks up the right to the Hobbit film.

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