In an interesting week of daily news reports regarding the fate of MGM studios, it appears that the pre-packaged bankruptcy deal has been approved today by the current holders of MGM’s $4 bill debt. The vote effectively joins Spyglass and MGM studios and will be directed by co-CEO’s from Spyglass management.
The agreement today follows daily news reports this week, that Carl Icahn has been purchasing outstanding debt in both MGM and Lionsgate. Thursday, Lionsgate released news that has filed a lawsuit suing Carl Icahn for interference when it attempted to merge with MGM earlier this year. Carl Icahn is known for being a corporate raider, however, he is a financier and on the Forbes list since the late 1970’s with his wealth in the billions. Icahn’s team is stating the lawsuit is “without merit” and is still pushing for a hostile take over in purchasing outstanding share of Lionsgate stock. Icahn currently owns 30% of Lionsgate stock making him the largest single shareholder.
MGM and Spyglass will be worth about $2 billion. MGM owns copyright on movies like Gone with the Wind, Wizard of Oz, James Bond Franchise and many more. MGM’s library of movies is said to contribute over $500 mil annually to its revenues. Hanging in the balance whilst MGM’s fate is being determined is Bond movie 23 which has been suspended indefinitely. Also on the fringes is “The Hobbit” movies which MGM, Warner Bros and New Line are jointly developing with Peter Jackson. Other movies planned were shelved waiting for the fate of MGM to be decided.
Lionsgate may still be involved in whatever happens when MGM/Spyglass exits bankruptcy protection. Movie studios hit hard by the recession are all struggling to finance films and hoping for box office successes to recoup investments and looking for cash reserves to finance future projects. Stay tuned as we monitor the fate of MGM. Bankruptcy restructuring will begin and the fate of the name of MGM and the iconic Leo the Lion are still yet to be determined