The money-strapped MGM studio has received numerous offers to be bought out, but none were anywhere near the $2 billion mark the company was looking for, the Hollywood Reporter announced on March 22. In light of not receiving a valuable offer, the studio’s more than 100 debt holders will most likely instead decide to file for bankruptcy and reorganize the company. However, for this to occur, two-thirds of the debt holders would have to agree to the reorganization.
Other studios bid on MGM, including Lionsgate. While it wasn’t immediately confirmed, it’s suspected that Time Warner also placed an offer. MGM said it will review the bids it has received over the next several weeks to evaluate whether or not their efficient enough to see the company. If the company’s officials decide not to sell, the studio’s equity would shift to lenders.
MGM was looking to be bought out because it owes a $200 million-plus interest payment by March 31, and another $250 million principal payment by April 8. However, studio officials said they will most likely seek extensions to strengthen the company’s financial position.
The studio currently owes money to JP Morgan, and lenders there will be determining the next course of action for payment. One suggested plan is to have bidders take equity stakes in MGM.
Written by: Karen Benardello
