According to Variety, Kluge is asking $650 million.
Here's a more comprehensive article from Reuter.
07:04 PM ET 04/21/97
Metromedia in talks to sell library to MGM
By Bob Tourtellotte
LOS ANGELES, April 21 (Reuter) - Metromedia International
Group Inc. is in talks with Metro Goldwyn Mayer Inc.
and its primary backer, billionaire investor Kirk Kerkorian,
regarding the sale of Metromedia's film library to MGM.
Sources familiar with the talks said they believe MGM and
Kerkorian have made a preliminary bid just above $300 million
for Metromedia's 2,200-title catalog. Metromedia's film
production units and chain of theaters are not included.
Spokesmen for Metromedia and the MGM/Kerkorian group
declined to comment.
Metromedia's library includes films like "Silence of the
Lambs" and "Dances With Wolves". Film libraries help generate
revenue through video and television licensing, and much of
MGM's current library of over 1,500 titles is bound by
arrangements until after 2000.
A deal could be struck as early as this week, the sources
said.
If terms cannot be reached, industry sources said several
companies are waiting in the wings for a shot at Metromedia's
entertainment assets, which include the movie catalog, the
Landmark theaters and film production units Orion Pictures,
Samuel Goldwyn Co. and Motion Picture Corp. of America.
"(Metromedia) has been approached by a number of parties
about selling their entertainment operations, and the most
recent speculation on MGM and Kirk Kerkorian probably has
merit," said Frederick Moran, managing director at New York
investment firm Furman Selz.
He said the entire group of Metromedia entertainment
assets, operated under the banner Metromedia Entertainment
Group, could fetch anywhere between $500 million and $650
million.
Metromedia and its Chairman John Kluge are looking to sell
the unit to shore up Metromedia's capital position in
anticipation of an aggressive expansion in wireless
communications markets in eastern Europe.
MGM wants the film library to boost its cash flow because
its distribution slate for new movies is very thin until
Christmas. Also, it would boost MGM's value in anticipation of
a future public offering of stock, which Chairman Frank Mancuso
has said is a possibility in the years ahead.
Analysts said Metromedia wants to sell the entertainment
group in one chunk, but would consider selling the library,
theaters and film production units separately.
Film industry sources said other entertainment companies
possibly interested in Metromedia's assets include Polygram, a
unit of Philips Electronics NV , Dreamworks SKG, the
film studio co-owned by Steven Spielberg, and British company
Pearson Plc . |
