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[Alfred E. Neuman]

7:50pm 09/13/04

Sony-led group buys MGM for $12/shr, plus debt (SNE, MGM) By David B. Wilkerson

SAN FRANCISCO (CBS.MW) -- Metro-Goldwyn-Mayer (MGM) late Monday said it has agreed to be sold to a Sony (SNE) -led consortium for $12 a share, plus the assumption of MGM debt, which would value the deal at about $4.84 billion, according to another person familiar with the agreement. The consortium also includes Texas Pacific, DLJ Merchant Banking Partners and Providence Equity Partners. MGM said it expects to recommend the deal to its board by Sept. 27. Shares rose 44 cents to close at $11.55 ahead of the announcement.


Sony-led group to buy MGM
Cash-and-debt deal valued at about $4.84 billion

By David B. Wilkerson, CBS.MarketWatch.com
Last Update: 8:22 PM ET Sept. 13, 2004


SAN FRANCISCO (CBS.MW) -- Metro-Goldwyn-Mayer late Monday said it has agreed to be sold to a Sony-led consortium for $12 a share in cash, plus assumed debt, in a deal valued at about $4.8 billion.


The consortium includes Texas Pacific, DLJ Merchant Banking Partners and Providence Equity Partners. MGM said it has received a $150 million security deposit from the consortium.

MGM (MGM: news, chart, profile) said it expects to recommend the deal to its board by Sept. 27. Shares rose 44 cents to close at $11.55 ahead of the announcement.

Wall Street was buzzing about the deal on Monday, as Sony had reportedly raised its bid for MGM over the weekend, in an effort to beat a competing offer from Time Warner (TWX: news, chart, profile). Sony's (SNE: news, chart, profile) U.S.-listed shares closed at $35.82, up 53 cents, ahead of the announcement.

Earlier Monday, Time-Warner pulled out of the bidding. Richard Parsons, Time Warner's chairman, announced that the media conglomerate had withdrawn its offer for MGM. Time Warner had been offering about $11 a share in cash, plus assumed debt for a total of $4.5 billion to $4.6 billion, one person familiar with negotiations said.

"Unfortunately, Time Warner could not reach agreement with MGM at a price that would have represented a prudent use of our growing financial capacity," Parsons said in a written statement. "We are confident that there are other capital allocation choices that will enable us to continue to build shareholder value."

After rising for much of the day, shares of Time Warner ended down 6 cents at $16.45. MGM rose 44 cents to close at $11.55.

MGM has been in talks with bidders for several months. The Hollywood-based studio has a film library containing about 4,000 titles, including the James Bond and Pink Panther film series.



Sony down in Tokyo after MGM news


By Lisa Twaronite, CBS.MarketWatch.com
Last Update: 8:35 PM ET Sept. 13, 2004

TOKYO (CBS.MW) -- Investors seemed unimpressed by news that Sony has won the bidding war for Metro-Goldwyn-Mayer and its treasure-trove library of movie titles.

In early trading on the Tokyo Stock Exchange Tuesday, shares of Sony (SNE: news, chart, profile) (JP:6758: news, chart, profile) were down 0.5 percent, while the Nikkei Stock Average was up 0.6 percent.

MGM (MGM: news, chart, profile) said late Monday said it has agreed to be acquired by a Sony-led consortium for $12 a share, plus the assumption of MGM debt, which would value the deal at about $4.84 billion.

The consortium includes Texas Pacific, DLJ Merchant Banking Partners and Providence Equity Partners. MGM said it expects to recommend the deal to its board by Sept. 27.

In late April, when the deal negotiations first surfaced in news reports, Sony's shares initially rose but ended lower on profit-taking, as investors realized that the purchase, if realized, wasn't likely to boost earnings much in the near term.

The deal will give Sony MGM's extensive film library, which include the James Bond series, and would allow Sony to control more than 8,000 movie titles, nearly half the color films on the market.

Sony's movie business now accounts for less than 10 percent of its total revenue. In its consumer electronics division, which accounts for about 70 percent of revenue, Sony has been behind competitors in introducing new products, such as flat screen televisions.