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Carl Icahn Extending Lionsgate Offer

His $7.50-per-share offer had been set to expire Monday but has been extended to December 2. Icahn is the biggest shareholder in Lionsgate, at 33%. The offer expires on the same day that MGM is supposed to receive confirmation of its bankruptcy plan – Icahn owns 18% of MGM’s debt. Icahn has repeatedly criticized Lionsgate for costs and said he plans to launch a fight for control of the company’s board. Lionsgate’s annual meeting is set for Dec. 14.

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BACK ON ITS FEET? MGM Creditors Crown Spyglass Partners New Chiefs

Mike Fleming

2ND UPDATE: MGM has just issued this statement about the results of the creditor voting:

“Metro-Goldwyn-Mayer Inc. (‘MGM’) today announced that the secured lenders voting in the Company’s solicitation process have overwhelmingly approved its proposed plan of reorganization (‘Plan’). MGM will now move expeditiously to implement that Plan, which will dramatically reduce its debt load and put the Company in a strong position to execute its business strategy. MGM is appreciative of the lenders’ support.”

UPDATE: The creditors have now officially approved the restructuring plan that puts the Spyglass chiefs atop MGM and gets the studio moving again. A statement will be released momentarily. Now, the fun begins. If MGM isn’t a distributor, the next installment of James Bond will be a jump ball. Expect Sony (which distributed Casino Royale to battle it out with Warner Bros and Fox, but watch Paramount emerge in the thick of it because of the close relationship that the studio has developed with Spyglass since that company became co-financier of Star Trek and the followup that is in the works. Read More »

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Lionsgate Sues Carl Icahn, Says He Was Playing A “Double Game”

Lionsgate has sued its biggest shareholder Carl Icahn, claiming he publicly opposed a merger between the company and MGM then gummed up the process until he could profit substantially from a potential marriage. Lionsgate claims Icahn publicly said he would oppose the merger, only to turn around and secretly buy up a large stake in MGM’s debt…and then push for the merger. ”It turns out that Icahn was misleading Lionsgate and its shareholders all along,” the lawsuit, filed in New York, says. And that “recent developments indicate he was playing a double game. Icahn opposed a merger not because it was bad for Lionsgate but because it was good – so good in fact that he wanted to postpone it until he could buy up as much of both companies as he could.” The suit also says that, “While urging Lionsgate shareholders to support his takeover campaign to ensure that Lionsgate did not pursue what he called a ‘delusional’ MGM transaction, Icahn was quietly amassing a huge position in MGM debt with the undisclosed intention of reaping profits from both sides in an eventual merger.” All of this comes one day before the voting deadline on a proposed prepackaged bankruptcy plan that would see Spyglass Entertainment’s Gary Barber and Roger Birnbaum take over the studio. Just this week, Icahn redoubled his efforts to buy up even more MGM debt in preparation for a Lionsgate merger, so the big unknown is how any … Read More »

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Carl Icahn and Lionsgate Redouble Efforts To Buy Up MGM Debt To Thwart Spyglass

Mike Fleming

Carl Icahn is now offering 50 cents on the dollar for MGM debt in an attempt to bolster his position before creditors vote Friday on a reorganization plan that puts Spyglass partners Roger Birnbaum and Gary Barber in the driver’s seat of the debt-hobbled studio. Icahn had previously been offering 45 cents on the dollar for debt, and the new offer comes with the stipulation that debt holders vote against the Spyglass offer. Lionsgate brass recently came out with an impassioned speech on why a Lionsgate-Icahn deal was better for creditors than the Spyglass plan which is half a year in the making. Considering how bitter the battle has been between Icahn and Lionsgate brass as he’s tried to take over the minimajor, doesn’t it sound like that couple you know, the one that is fighting constantly and decides that if they just went ahead and had a baby, everything would be perfect? MGM, which watched Mary Parent exit as its pic chief after she was stymied in her efforts to create a production slate for the Lion, needs a steady hand and many feel that the Spyglass guys would provide it. The prepackaged bankruptcy with Birnbaum and Barber has never been viewed as a permanent solution. It has always been viewed by insiders as “kicking the can down the road.” Bolder plays with an outside suitor like Lionsgate is necessary later on, but it doesn’t necessarily have to … Read More »

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Icahn Makes Offer To Buy More MGM Debt To Expedite Merger

Calling the proposed Spyglass plan a “presciption for disaster,” Carl Icahn on Thursday offered to buy another $963 million of MGM’s debt. He already owns around $500 million of it, so the sum would make him one of MGM’s largest creditors – with a stake of around 37%. Pending the offer, he would then be in a good position to approve a merger between Lionsgate and the studio, one he now supports. Some of MGM’s creditors are pushing hard for that prepackaged bankruptcy plan that would instead see Spyglass’ Gary Barber and Roger Birnbaum come in and run the studio. As a condition of his offer, Icahn said anyone selling to him must vote against the Spyglass plan; a vote is scheduled for Oct. 29. Icahn also stated on Thursday: “This is the critical decision point for MGM lenders, yet we are being rushed into an extraordinary Prepackaged Plan with limited information and input, on a “hurry up basis” that frustrates any dissent. I hope to defeat this “rush to judgment.”

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Mary Parent Is Officially Out At MGM; Studio’s Lenders Given More Time To Review Spyglass Info

BREAKING NEWS… UPDATE: She has signed a non-disclosure agreement and therefore can’t talk publicly to the media. But, making no secret that she was negotiating her exit from MGM after taking the job in April 2008, Mary Parent this afternoon is now officially out at the studio where she was Chairman of the Motion Picture Group and Co-CEO. It’s a sad ending to Parent’s struggle to revive the debt-ridden cash-strapped studio and get it producing and distributing movies again against huge odds. That she was able to accomplish anything at all, even a few releases and co-productions, is testament to her professionalism and personality. Hollywood needs to salute her.

Parent and her staff, meanwhile, has had to go into the Century City offices every day for months and basically do nothing. “A really good group of people came in here to sit on the bench in their prime. What wasted capabilities and wasted potential,” she has told pals. In private conversations with Hollywood, she called it “a perfect storm against us” of events that sank her management team. She’ll probably catch her breath before thinking about another job. (The offers are just coming in now.) In the end, she like everybody else puts all the responsibility for the studio’s demise on Harry Sloan and his inability to tell the truth. ”In a weird way, it’s like coming off a bad relationship,” she told a friend Friday. “I married the wrong guy and woke up pregnant.” (see below for more) Read More »

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Latest Twist In MGM Saga Unfolds In India?

Mike Fleming

Indian conglomerate Sahara India Pariwar is reported to be in exploratory talks to buy the debt-hobbled MGM studio for $2 billion, according to the Wall Street Journal. Bloomberg adds that the Broccoli family, owners of the James Bond rights, are aligned. What an endless soap opera. Later, Bloomberg corrected itself to say that Eon disavowed even knowing about the Indian bid.

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MGM’s Umpteenth Debt Extension: Oct. 29

I’m still on vacation but can’t escape those beleaguered MGM announcements. The studio said today its lenders agreed to extend the forbearance period and therefore will not seek remedies in connection with the nonpayment of interest and principal due on the company’s bank debt, including the revolving credit facility, until October 29, 2010. “The lenders took this action in support of the Company’s ongoing efforts to evaluate long-term strategic alternatives to maximize value for its stakeholders. MGM appreciates the continued support of its lender group throughout this process.” The studio is going through a pre-packaged bankruptcy before Spyglass takes over.

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Bloomberg: MGM Creditors To Vote On Pre-Packaged Bankruptcy Plan This Month

Nellie Andreeva

MGM creditors will be asked to approve a restructuring and pre-packaged bankruptcy plan for the studio within the next week or two, Bloomberg reports. This follows Spyglass chiefs Roger Birnbaum and Gary Barber’s signing non-binding letters of intent on Wednesday to become MGM co-chairmen/CEOs. So this next step of a pre-packaged bankruptcy proceeding has been expected for months. It would convert debt to equity and remove the $4 billion debt which has crippled the studio so that it can start generating films again. According to Bloomberg, Birnbaum and Barber would receive 5% of the merged company for their film library, valued at $100M.

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Spyglass Partners Inch Closer To MGM Reins; Battle Royals Looms For James Bond Distribution Rights

Mike Fleming

As expected, the MGM ownership situation is getting closer to being sorted, and it won’t be long before the Lion has a chance to roar again. Or at least emerge from its cage. Spyglass chiefs Roger Birnbaum and Gary Barber have signed non-binding letters of intent that will make them MGM co-chairmen/CEOs. That leads to the next step, which is a pre-packaged bankruptcy proceeding that would convert debt to equity, removing the $4 billion albatross from around the Lion’s neck so that it can start generating films again. The prepackaged bankruptcy allows the company to be restructured while it freezes existing deals for franchises that include the James Bond series and The Hobbit.

The LA Times reports that the Spyglass guys are already looking past this hurdle, and are talking with Ken Schapiro about coming aboard as COO. He’s a vet of Qualia Capital, which was among the entities that kicked the tires on MGM before management decided to go with Birnbaum and Barber, who are expected to make projects but will likely eliminate the studio’s marketing and distribution arms and set the projects up elsewhere. All this means that The Hobbit, with Peter Jackson at the helm, can move forward, with co-financing partner Warner Bros distributing the two films worldwide.

The situation on 007 will be more feverish. Warner Bros, Sony Pictures Entertainment and 20th Century Fox are the obvious outlets, … Read More »

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