James Delahunty
26 Sep 2004 20:16
A group of investors including Sony Corp have agreed on a deal to buy Metro-Goldwyn-Mayer Inc for US$12 a share (about US$2.9 billion). The deal would give the investors control of one of the world's largest film libraries. US$1.6 billion in equity financing was committed by the group to buy the Los Angeles based company and will assume about US$2 billion in debt. Providence Equity Partners invested US$525 million, Texas Pacific Group contributed US$350 million, Sony and Comcast each invested US$300 million, while Credit Suisse Group's DLJ Merchant Banking put in US$125 million.
Sony bought Columbia TriStar Motion Pictures about 15 years ago and this deal to buy MGM would expand their film library to 8,000 titles. Sony is currently seeking to capture more home based video business. "With all these parties involved, I don't see how Sony could not turn this into a profitable project," said John Yang, an equity analyst at Standard and Poor's. The purchase will not be complete until the middle of 2005. MGM will continue to operate under the same name but as a Los Angeles based private company.
Sources:
Xinhuanet
eTaiwan News
MENAFN
Lakeland Ledger