Variety – Beleaguered MGM appears to have pushed back the deadline for binding offers until at least Monday.
The studio had no comment as Friday’s deadline for bids passed. The three most likely bidders—Access Industries, Lionsgate and Time Warner—also had no comment as to whether any of them had submitted offers.
Several people familiar with the situation said MGM had indicated it was extending the deadline.
The assets include rights to the James Bond and Hobbit franchises, a 4,000-title library and the MGM and United Artists logos and current operations. A decline in DVD revenues has led to a decline in expectations as to how much MGM would fetch in the auction.
If bids fall short of expectations or no bids materialize, MGM could attempt a recapitalization through investment bank Qualia Capital through a cash infusion and a debt-to-equity transaction that would allow MGM to remain in business as a stand-alone entity.
Since turnaround specialist Stephen Cooper came on board as chairman, the debt holders have agreed three times to hold off on receiving debt payments, with the most recent extension going to March 31. MGM’s facing repayment of its $250 million revolving credit line in early April and a $1 billion payment on its $3.7 billion debt in July 2011.
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