The Sahara India Pariwar, an Indian conglomerate with deep pockets in the real estate and media sectors, is in talks about buying the debt of struggling film studio Metro-Goldwyn-Mayer for $1.5 billion to $2 billion, according to news reports.
Reuters reported that the talks are still in a preliminary stage. One source told the news agency that the Sahara group is contemplating a nearly $2 billion, all-cash deal for MGM's debt. Another source put the deal at roughly $1.5 billion.
It was unclear how MGM's committee of creditors would view the offer, according to an Associated Press report. A spokeswoman for the studio declined to comment on the talks with the Sahara group. MGM, facing possible bankruptcy, has several suitors, including Spyglass Entertainment, Time Warner Inc and Lions Gate Entertainment Corp.
Sahara India Pariwar has diversified business interests that include financial services, housing finance, mutual funds, life insurance, city development, real estate activities, print and television media, film production, sports, information technology, health care, tourism, hospitality and consumer products. It owns a Hindi language news channel Samay, and a bouquet of 36 city specific regional news channels, among others.
The new development comes at a time when Spyglass Entertainment is reported to have signed a nonbinding letter of intent to take over the MGM management.
The letter of intent from Spyglass founders Gary Barber and Roger Birnbaum was signed sometime last week. The studio's debt holders and board of directors are yet to approve the deal. MGM would need to file a prepackaged bankruptcy before the Spyglass pair can assume control subject to board approval. According to The Hollywood Reporter, the tentative agreement with Spyglass values MGM at $1.9 billion.
Meanwhile, activist-investor Carl Icahn, who is fighting for control of Lions Gate entertainment with his 33 per cent of stock, is said to be quietly buying up debt in MGM. Icahn had previously accumulated and then sold off debt in MGM earlier this year. In the past few weeks he has already acquired a single-digit percentage in the studio's $4 billion debt. He has also picked up substantial debt in the near-bankrupt home-video chain Blockbuster Inc.
Independent studio Lions Gate Entertainment Corp too has an alternative proposal on the table to merge with MGM, according to the Los Angeles Times. Warner Bros parent Time Warner Inc is also in the queue with a long-standing $1.5-billion acquisition offer.
