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| The Metro-Goldwyn-Mayer logo graces the
entrance gates at their Santa Monica, Calif., offices July 23,
2002.(Agencies) |
Hollywood's last major independent studio,
Metro-Goldwyn-Mayer, says it has agreed in
principle
to be bought by Japan's Sony Corporation.
US media group Time Warner earlier withdrew its bid for MGM saying it
could not agree on a price.
The Sony offer is reported to be $5bn, over half in cash and the
remainder the assumption of MGM debts.
The deal will give Sony access to MGM's film library, a key source of
cash as more movies are released on DVD.
MGM classics include Ben Hur, Gone with the Wind and The Wizard of Oz;
it also has the rights to James Bond.
Sony will reportedly pay $12 per MGM share, a total
of $2.93bn, and take on
about $2bn of MGM debt.
"MGM management is expected to recommend the proposed merger to its
Board by September 27, 2004," said a statement issued by the studio late
on Monday.
MGM was founded in the golden age of Hollywood in 1924 after a merger
between Metro Pictures Corporation, Goldwyn Pictures, and Louis B Mayer
Productions.
The iconic studio has been in talks with bidders for several months,
and a decision on the sale is now expected to come within days.
Time Warner's offer was said to be made up of cash and shares.
The Japanese electronic giant's bid is backed by two private equity
firms, Texas Pacific Group and Providence Equity Partners.
Sony also offered a security deposit of $150m.
(Agencies) | 
Updated: 2004-09-14 10:43