Sony agrees to buy MGM for $5 billion, according to initial reports

14-Sep-2004 • Bond News

Has James Bond finally got a new owner?

Sony Corp. has reportedly reached an agreement to buy film studio Metro-Goldwyn-Mayer Inc. in a deal worth about $5 billion, a wire report said Monday, just hours after rival Time Warner Inc. dropped out of the bidding. - reports CNN Money.

Sony and its partners -- investor groups Providence Equity Partners, Texas Pacific Group and an arm of Credit Suisse First Boston -- are now offering to buy MGM for about $12 a share, or about $2.9 billion in stock, plus the assumption of $2 billion of debt, Reuters reported.

That was up 75 cents a share from Sony's original bid of $11.25 a share, or a little under $4.7 billion, including the debt, the news agency said, citing a person close to the talks.

Earlier Monday, Time Warner withdrew its bid for MGM, saying the two entertainment firms have failed to agree on a price.

"Although MGM is a valuable asset, we have decided to withdraw our bid," Dick Parsons, chief executive of Time Warner, said in a statement. "Unfortunately, Time Warner could not reach agreement with MGM at a price that would have represented a prudent use of our growing financial capacity."

Entertainment firms have been vying for MGM to get its library of more than 4,000 films, which includes the James Bond , Pink Panther and Rocky titles.

The acquirer would be able to reformat the library's films for sale in the sizzling DVD market.

Reuters also reported that cable television giant Comcast Corp. will be a minority investor in Sony's purchase of MGM.

Thanks to `Kyvan` & `Bushman` for the alert.