It seems every month or so another potential source of money for MGM emerges: first it was Relativity Media, then Terry Semel wanted to buy the studio, now it’s Kirk Kerkorian. None of these possible purchases have panned out, so we’re not holding our breath that Kerkorian will actually buy the lion.
But interestingly, in pricing MGM at $3 billion, the grizzled financier has revealed that the studio is now worth $2 billion less than it was when a Sony-led private-equity consortium bought it in 2004.
In other Kirk Kerkorian news, he’s reportedly testifying at the second Pellicano trial today.
THR: rumours circulated Tuesday among entertainment bankers that Kirk Kerkorian had floated a $3 billion offer to MGM.
scepticism was high that such an offer — if even true — would go anywhere. But the most intriguing aspect of the speculation was the notion MGM currently carries a valuation of just $3 billion.
A banking consortium led by Sony bought the studio in 2004 in a deal valued at $5 billion at the time. But Kerkorian’s purported $3 billion offer roughly equates to the value of the studio implied in recent trading activity in MGM debt instruments, banking-community insiders noted…
Well-placed sources indicate MGM is sufficiently capitalised to fund film chief Mary Parent’s ambitious new slate of film productions and other studio operations for at least another year. But after that, most believe, the studio likely will need to turn to new equity investors to maintain equilibrium.
Business Insider Emails & Alerts
Site highlights each day to your inbox.