The MGM bankruptcy saga is still unfolding, folks. Last we reported, Spyglass Entertainment was enacting procedures to take over MGM. Spyglass currently has a reorganization plan set in place, and MGM’s board of over 100 lenders have only to vote on the plan and approve it, before Spyglass CEOs Gary Barber and Roger Birnbaum would take over MGM.

However, Lionsgate – another mini-studio that has been making a bid for MGM throughout this saga – is apparently not going down without a fight.

According to The Hollywood Reporter Lionsgate has employed the services of investors Carl Icahn and Gordon Crawford of LA-based Capital Research to help pitch a new proposal to MGM in order to lure its creditors away from the Spyglass deal. The MGM lenders would have to “throw in the towel” on the Spyglass deal in order to consider the Lionsgate proposal.

What is Lionsgate offering? Reportedly a deal where 55% of the new company would be owned by the MGM creditors, with 45% owned by Lionsgate. The plan would set MGM’s value at about $1.8billion (around the same value of Spyglass’ plan); Certain creditors would be barred from holding equity in order to continue to carry new MGM debt.

lionsgate logo Lionsgate Making A Last Minute Play for MGM

At the moment Icahn and Crawford are lobbying for key MGM creditors to delay a vote on the Spyglass deal; as one Lionsgate source put it, “If there’s a delay, I think it’s all over for Spyglass,”  – however, should the vote precede, MGM creditors are expected to take the Spyglass deal.

Apparently we James Bond and/or Hobbit fans aren’t the only ones getting frustrated with this MGM fiasco; mud is being slung between those close to the negotiations and the delays in reaching a resolution are ultimately starting to harm MGM’s prospects of recovery; legal fees aren’t cheap.

The Spyglass deal would keep MGM producing new movies; the Lionsgate deal would rely on “operational synergies” between the two studios using their mutual film libraries, with the only planned production being the James Bond franchise at the moment. Thankfully Warner Bros. already has a fraction of financial control over The Hobbit, so I for one wouldn’t expect that production to be abandoned.

Said Crawford of the Lionsgate proposal: “We’re very supportive of the proposed transaction, principally because we think the combination of Lionsgate and MGM is a pretty powerful combination of assets.

Capital Research manages a large section of Lionsgate shares while Icahn is also a percentage holder of MGM’s current $4 billion debt. Needless to say, this deal would be in Icahn’s best interests.

To be honest, I have no dog in this fight – my money isn’t on the table. Therefore, it is easy for me to be of the opinion that this Spyglass vote should proceed interrupted and unchallenged – anything to get this MGM mess settled and films like Bond and The Hobbit back into production.

But again, that’s all easy to say when it’s not your money on the table. We’ll keep you posted as to what develops in this MGM/Spyglass/Lionsgate standoff.

Source: THR