Time Warner increase MGM buy-out bid to $4.6 billion all-cash deal

02-Sep-2004 • Bond News

Time Warner has restructured its proposed cash-and-stock acquisition of Metro-Goldwyn-Mayer to make it an all-cash offer, according to a published report Wednesday, reports CBS MarketWatch.

Time Warner has put a $4.5 billion to $4.6 billion bid for the famed studio on the table, The Wall Street Journal reported.

Representatives for MGM and Time Warner declined to comment.

However, shortly before the report of the Time Warner offer came out, MGM issued a written statement saying that press reports of a $5 billion bid were incorrect.

"MGM assumes no obligation to update investors or others regarding its consideration of strategic alternatives or the progress of any discussions or negotiations that are taking place," the company's statement said.

For months, MGM has been in talks with Sony about a possible deal, but those negotiations have been hung up.

By some accounts, Time Warner is considered the favorite in the race. Time Warner jumped into the fray later when it became apparent that discussions between MGM and Sony had hit a roadblock.

MGM's stock jumped Wednesday after newswire reports circulated that company executives were ordered to halt trading, fueling speculation that a sale of the studio may be imminent.

Shares of MGM closed up 70 cents, or 6.1 percent, at $12.10. Time Warner lost 18 cents, or 1.1 percent, to $16.17. Sony's U.S.-listed shares ticked up a penny to $34.68.

MGM, which owns one of the world's largest movie libraries with more than 4,000 titles, is considered a prize property because the library can spawn a number of other businesses.

Included in the library are a slew of Academy Award winners such as "Rain Man," "Silence of the Lambs" and "Rocky." MGM also holds claim to the lucrative James Bond and "Pink Panther" franchises.

Thanks to `Mathewww` for the alert.