MGM watch: WSJ says Icahn trying to force MGM, Lions Gate merger

This is more than enough to make a Bond fan’s head explode. After a day of various media reports (see previous post), News Corp.’s Wall Street Journal is reporting that investor Carl Icahn is trying to force a merger between Metro-Goldwyn-Mayer Inc. and Lions Gate Entertainment.

The above paragraph has a link to the entire story. The article by Mike Spector and Lauren A.E. Schuker starts like this:

Billionaire investor Carl Icahn bought a significant chunk of Metro-Goldwyn-Mayer Inc.’s debt and is pushing the beleaguered film studio to merge with rival Lions Gate Entertainment Corp., said people familiar with the matter.

Mr. Icahn is Lions Gate’s largest shareholder, at just under 33%.

Mr. Icahn told people close to MGM earlier this week he holds somewhere between $400 million and $500 million of MGM’s debt outstanding and is continuing to build his position in the studio, they said. The purchases give Mr. Icahn about 10% of MGM’s outstanding debt.

So to recap:

— MGM has been pursuing a complicated deal with Spyglass Entertainment where Spyglass’s top executives would take command of MGM, the company would then pursue a “prepackaged” bankruptcy to try to wipe out its $3.7 billion debt and MGM would just produce TV shows and movies and cut deals with other studios to release any movies (like James Bond movies) the studio is involved with.

— One News Corp. outlet (the New York Post) reported that Time Warner was boosting/was thinking of boosting its bid for MGM. Another News Corp. outlet (Dow Jones Newswires) reported that Time Warner denied that story.

— One News Corp. outlet (the Post again) said Icahn was mulling getting involved, while another (the Journal story story quoted above) said he was already involved.

By the way, we forgot to mention that News Corp. is run by Rupert Murdoch who, supposedly, was one of the inspirations for media magnate/Bond villain Elliott Carver in Tomorrow Never Dies. The late Robert Maxwell and Ted Turner were also mentioned as inspirations for the character played by Jonathan Pryce.

We’ve said it many times, but we’ll repeat: all of this matters for James Bond movie fans because MGM controls half of the 007 franchise. For Bond fans, it’s a case of pass the Alka-Seltzer. It’s even more reason not to count on attending the premier of Bond 23 anytime soon.

MGM watch: the soap opera continues — Indian conglomerates, Carl Icahn, Time Warner

Metro-Goldwyn-Mayer Inc. still has no completed deal with Spyglass Entertainment yet while Sahara India Pariwar continues to hang around, after originally being rejected. UPDATE I: And this morning there’s a New York Post report that investor Carl Icahn and Time Warner may make some moves. All of which means the fate of Bond 23 remains unsettled.

First, this week on the Sahara India Pariwar front: here’s how AN ASSOCIATED PRESS STORY ON YAHOO’S FINANCE WEB SITE published on Sept. 28 began:

LOS ANGELES (AP) — Indian conglomerate Sahara India Pariwar says that the creditors of struggling Hollywood studio Metro-Goldwyn-Mayer Inc. have agreed to reconsider its $2 billion cash offer for the company.

The development marks a reversal from last week, when Sahara said the creditors committee rejected the offer within hours of a conference call with Sahara chairman Subrata Roy Sahara.

The story quotes a Sahara spokeswoman as saying MGM initially rejected her company’s bid because it had submitted “documentation of its assets in rupees.” Oops.

Carl DiOrio of the Hollywood Reporter followed up the next day. YOU CAN READ THE STORY BY CLICKING HERE. Here’s an excerpt:

Lenders-side sources are uncertain how seriously to take Sahara, in part because the Indian company has dealt only with management so far and has had scant contact with the debtholders. But it’s clear the lenders would be open to reviewing a bid of $2 billion or more for MGM by Sahara or anyone else.

Early Sept. 30, News Corp.’s New York Post weighed in. You can read the entire story BY CLICKING HERE. Here’s an excerpt:

There is renewed interest in movie studio MGM from Time Warner and Carl Icahn, The Post has learned.

Time Warner last week, through back channels, told the hedge funds controlling the studio it could be willing to raise its offer to $1.7 billion from $1.5 billion. The hedge funds rejected the idea, a source with direct knowledge of the situation said.
(snip)
Meanwhile, Icahn, who already owns roughly $500 million of MGM’s $4 billion in debt, is buying more, the source with direct knowledge said, adding that he would not be surprised if Icahn, through Lionsgate Entertainment, soon offers a new proposal.

These stories need to be read carefully. Note the Post’s unnamed source is quoted as saying he wouldn’t be surprised if Icahn would make a bid, but that’s not the same thing as *knowing* the investor would make a bid. Interestingly, even though the story by Josh Kosman and Claire Atkinson begins with Time Warner, the online edition headline is, “Icahn mulls new proposal for MGM.”

If Time Warner is really interested, as the Post says, it would mark a change of attitude. Recently, Time Warner didn’t have kind words for MGM.

UPDATE II: On The Wall Street Journal’s Web site, there’s a Dow Jones News Service story quoting Time Warner AS DENYING THE NEW YORK POST STORY. The Journal and Dow Jones News Service are also owned by News Corp., the New York Post owner.

Like other Bond fans, we’re suffering from MGM fatigue. (The way we had to update this post twice today is an example.) But until it gets settled, fans will have to be content with re-watching their 007 DVDs or checking out new Bond books and video games.