Remember back in May when a blog (not DHD) claimed Relativity was making a move on MGM? And the truth turned out to be that hedge fund Elliott Capital (the funding source behind Relativity) was simply buying some MGM term loan debt? I knew the “Relativity aiming to take control of MGM” was bullshit and so did my sources. Now it’s clear Elliott Capital had no strategic interest in MGM and was simply buying the debt to hopefully sell it later at a higher price (which is no different then buying stock at $X and hoping to sell it at $Y for a short-term profit). Elliott Capital bought the distressed MGM debt for about $400M at less than 50 cents on the dollar. Now my financial sources on Wall Street tell me that Elliott Capital has recently laid off much of its position in MGM debt. This transaction had nothing to do with Relativity, by the way. (Ryan Kavanaugh has his own problems: his Relativity was a 50% financier of Universal’s big bomb Land Of The Lost, and its upcoming The Perfect Getaway isn’t tracking.) Oh, and that’s the same error-filled blog that kept telling readers there’d be no William Morris/Endeavor merger, or mistook old merger talks pre-Twilight for a new Summit/Lionsgate deal, or claimed an Avatar trailer would debut with Transformers 2, or thought Peter Chernin working for Bob Iger at Disney sounded plausible, or insisted DHD was selling to The Huffington Post, and more.
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- MGM FIGHTS TO SURVIVE: Desperate To Restructure Crushing Debt Due In 2012
Editor-in-Chief Nikki Finke - tip her here.