1. Lender streamlining could help MGM's cause

    By Devin Zydel on 2010-04-15

    The Hollywood Reporter – The recent consolidation of MGM debt into a fewer number of individual lenders could make the cumbersome task of restructuring the studio more manageable.

    Buying on the public market, about a half-dozen lenders have accumulated more than 51% of Lion debt. That means a relatively small group wields substantial control over decisions looming large in the Century City studio’s future.

    The three biggest debtholders are Anchorage Advisors, Highland Capital and Davidson Kempner. Their reps are among those attending a meeting of a lenders steering committee that J.P. Morgan led Thursday as well as one set for today in Los Angeles.

    Like a previous meeting of the steering committee, lenders are attempting to educate themselves about how MGM operates and how the studio might restructure finances and operations to compete in Hollywood on firmer footing. But instead of management presentations, which took up much of the previous meeting of Lion lenders, the committee is hearing from Hollywood notables outside the studio.

    The names of former industry executives including Jonathan Dolgen and Peter Chernin have circulated as possible candidates to run MGM. But for now, such Hollywood VIPs are being consulted for advice on the studio’s restructuring options.

    On the other hand, turnaround specialist Stephen Cooper eventually will segue out of his role as MGM CEO and move on to the next corporate crisis in another industry. So those cozying up to the lenders committee as consultants could resurface in operating roles.

    Spyglass principals Gary Barber and Roger Birnbaum also are among those held in high regard for their business prowess, and a key lenders-group insider has touted the duo as potential full-time Lion keepers following a restructuring.

    For much of the past year, MGM has grappled with a range of tough choices as it struggles under a crushing $3.7 billion debt load. The Lion has until May 14 to make a $200 million-plus interest payment on its debt as well as a $250 million principal payment.

    Studio management has been huddling with a J.P. Morgan-led lenders steering committee on how to pump some capital into the Lion before then. To do that, a debt restructuring likely would shift most studio equity from current owners to the lenders group.

    That’s assuming Time Warner or others participating in a recent auction of the studio decide against upping their bids, which were deemed too low to accept. Offers came in at $1.5 billion or lower, and MGM lenders—who must approve any sale of the studio—likely would nix anything substantially below $2 billion.

    At least that was the thinking when there were more than 140 debt holders in the mix, with a substantial minority stridently opposed to approving anything less than the current market value of MGM’s tradeable public debt. Yet the debt recently has been trading at less than 50 cents on the dollar, suggesting a sub-$2 billion valuation.

    Now that the number of lenders has been whittled down substantially, there’s a greater chance that Cooper will win a consensus for some sort of reorganization plan. And that’s assuming lenders don’t conspire among themselves to force an a la carte sale of MGM’s choicest assets such as the James Bond film rights, yet another of the possible outcomes to the studio’s months-long financial crisis.

    A handful of companies including Qualia Capital, Access Industries, News Corp. and Time Warner have agreed to lend MGM upward of $500 million in new equity capital.

    The Lion’s current ownership group includes Providence Equity, TPG Capital, Sony, Comcast, DLJ Merchant and Quadrangle.

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  2. Time Warner weighs MGM bid structures

    By Devin Zydel on 2010-04-10

    Reuters – Time Warner Inc is evaluating possible new structures to its bid for Metro-Goldwyn-Mayer, as the auction for the studio drags on, sources familiar with the matter said on Friday.

    A meeting with MGM’s advisors is expected to be sought to talk about ways that the media giant could move forward in the bidding process, one of those sources said.

    Time Warner put in a $1.5 billion cash bid in the last round of a long-running auction for MGM, but the studio has told it and rival bidder Access Industries that their bids were too low, a separate source familiar with the situation said.

    Lenders to MGM, struggling under $3.7 billion of debt, are pushing for a stand-alone plan, that second source said. That would require $1 billion in financing, including $500 million to make six to eight films a year, sources familiar with the matter said.

    The new structures Time Warner are considering proposing could see it modestly increase the amount of its bid, two sources familiar with the situation said. That may not appease creditors—who had hoped for at least $2 billion, other sources previously told Reuters.

    Structures also could include giving MGM a share in the company going forward—for example, giving them a minority ownership split such as 20 percent, or having some share in the performance of certain assets. MGM’s creditors would then have the potential to gain if the company performs well.

    Another structure could see Time Warner act as an operating partner with MGM, helping with production and distribution of films, although this could be difficult as it would require operating agreements to be negotiated, those sources said.

    Time Warner, MGM and an advisor to MGM’s creditors declined to comment.

    No decision has yet been made by the media giant on how to structure a new bid, or whether it would be formally made, the sources said.

    Time Warner is home to Warner Bros Studios, which owns the Batman and Harry Potter franchises and has one of the world’s largest film distribution networks.

    Time Warner, MGM and an advisor to MGM’s creditors declined to comment.

    MGM said in November it was exploring a potential sale of the company. It said at the time its other options included operating as a stand-alone entity or forming strategic partnerships.

    Despite a film library that includes the James Bond and Pink Panther franchises, MGM has been struggling to create new hits. It is also trying to cope with plunging DVD sales as consumers move to viewing online. The financial crisis has not helped either.

    MGM will likely file for bankruptcy protection either under the stand-alone plan or along with any sale, sources familiar with the process have previously told Reuters. Such a plan would need approval from a majority of the creditors.

    In the last round of bidding, three bids were put in—Time Warner with a bid of $1.5 billion, billionaire industrialist Len Blavatnik’s Access Industries, whose offer involves an equity infusion and help with restructuring the company’s $3.7 billion of debt, sources have said.

    The third was from Lions Gate Entertainment which decided it would not increase its offer, putting it effectively out of the running, sources previously told Reuters.

    MGM was bought in 2005 in a $2.85 billion buyout by a group that included four private equity firms—Providence Equity Partners, Quadrangle Group and DLJ Merchant Banking Partners, as well as media companies Sony Corp and Comcast Corp—which saddled the company with debt.

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  3. Hollywood top guns take shot at reviving MGM

    By Devin Zydel on 2010-04-08

    Financial Times – Tony and Sir Ridley Scott have emerged as surprise contenders to steer Metro-Goldwyn-Mayer back to solvency after submitting a restructuring plan to the Hollywood studio’s lenders.

    The brothers, who between them are responsible for Alien, Top Gun and Gladiator, have expressed interest in running MGM, according to people familiar with the situation.

    MGM, struggling under a $3.7bn debt burden, is in the hands of its creditors after it became clear it could not afford to meet its repayments. Companies in the Sony-led consortium that paid $5bn for the studio five years ago, including TPG and Providence Equity , have seen their equity wiped out.

    The studio, which owns the James Bond series and produced The Wizard of Oz, is on the auction block.

    Time Warner led the bidding with a $1.5bn offer. But creditors were underwhelmed and are leaning instead towards a debt-for-equity swap and an injection of new capital to create a standalone company with a reduced debt burden.

    Steven Cooper, the restructuring specialist who oversaw the bankruptcy of Enron, is managing the sale and is acting as interim chief executive.

    He is likely to oversee a transition until a new management team—possibly including the Scott brothers—and a new chief executive are in place.

    “MGM needs a chief executive that Wall Street knows and respects,” a person familiar with the matter said.

    The creditors have not decided whom to approach for the chief executive role.

    Jonathan Dolgen, former chairman of Paramount Pictures, has been mentioned, as has Roger Birnbaum, chief executive of Spyglass Entertainment.

    The Scott brothers have their own production company, Scott Free, but it is unclear whether their proposal would involve combining it with MGM, or if they are seeking a stake in the recapitalised studio. They could not be reached for comment.

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  4. MGM mulls standalone plan, suitor grows restless

    By Devin Zydel on 2010-04-02

    Reuters – Metro-Goldwyn-Mayer’s steering committee met with creditors on Thursday to present a stand-alone plan for the studio, as Access Industries threatened to drop its bid unless it gets a response soon, sources familiar with the matter said.

    Creditors presented a plan that abandons the idea of a sale of the entire studio and involves a mandate for MGM to make six to eight movies a year and requires large amounts of capital, after the studio was disappointed with bids it got in a second-round of bidding last week, said the sources, who requested anonymity because they were not authorized to speak on the record about the negotiations.

    MGM and Access declined comment.

    The stand-alone plan being floated on Thursday involves debt-ridden MGM filing for a pre-arranged bankruptcy and would require approval from a majority of the creditors.

    One of the sources said the steering committee and creditors were discussing potential sources for cash infusions and new management possibilities under the stand-alone scenario on Thursday.

    The storied studio, whose roster of stars included Greta Garbo, Joan Crawford, Clark Gable and Jean Harlow, enlisted turnaround specialist Stephen Cooper last year as vice chairman and a member of its office of the chief executive to help it restructure.

    Billionaire industrialist Len Blavatnik’s Access Industries was one of three parties to put in bids last week, but another of the sources familiar with Access said the company was still waiting for MGM to respond to its bid and indicated it may drop out of the bidding if it does not get clarity soon.

    Lions Gate Entertainment, another bidder, has already withdrawn from the auction, while Time Warner Inc put in the highest bid of $1.5 billion in cash.

    Access Industries’ offer involves an equity infusion and help with restructuring the company’s $3.7 billion of debt, sources have said.

    The source familiar with Access said Access has not had any discussions with the creditors concerning its bid nor any discussions with MGM or advisors regarding its providing financing to MGM as part of the restructuring plan and it will not wait much longer.

    MGM, home to more than 4,000 film titles, said in November it was exploring a potential sale of the company, but as the auction progressed, buyer interest in the company dwindled.

    Despite a film library that includes the James Bond and Pink Panther franchises, MGM has been struggling to create new hits. It is also trying to cope with plunging DVD sales as consumers move to viewing online.

    The credit crisis has not helped, either.

    A buyout in 2005 by a group including four private equity firms, Providence Equity Partners, Quadrangle Group and DLJ Merchant Banking Partners, and media companies Sony Corp and Comcast Corp, also saddled the company with debt.

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  5. Access Industries said to weigh quitting MGM studio auction

    By Devin Zydel on 2010-04-01

    BusinessWeek – Billionaire Len Blavatnik’s Access Industries may drop out of the bidding for Metro-Goldwyn-Mayer Inc., a person with knowledge of the situation said.

    Access Industries, vying for control of the Los Angeles-based studio with Time Warner Inc. and Qualia Capital, hasn’t received a response to its restructuring proposal from MGM or its creditors, said the person, who asked not to be named because the terms are private.

    Blavatnik’s departure would remove a potential source of fresh capital for MGM, which put itself up for sale last year after falling behind on $3.7 billion in debt. Turnaround specialist Stephen Cooper, who joined the studio as vice chairman in August, will ask creditors on April 1 for new funds to restructure debt and keep the company independent, said four people with knowledge of the proposal.

    Lenders deemed the current offers too low, a person with knowledge of the deliberations said last week. Creditors agreed to extend a moratorium on interest payments through May 14, MGM said in a statement today. The forbearance applies to a $3.7 billion loan and a revolving credit facility.

    Cooper is part of a three-member Office of the CEO at MGM, along with production Chairman Mary Parent and Chief Financial Officer Bedi Singh. His plan calls for making as many as 12 films a year, according to one of the people, who sought anonymity because the proposal isn’t public.

    The executive is seeking as much as $1 billion, including equity to finance operations and funds for movie production, said one of the people.

    Time Warner, Qualia

    Time Warner has offered $1.5 billion for MGM, a person with knowledge of the auction said last week. The New York-based parent of the Warner Bros. film studio is seeking to purchase MGM, while the others are proposing to recapitalize the company and keep it independent.

    New York-based Qualia has increased the cash in its proposal, according to one person. The company, led by Amir Malin and Ken Schapiro, presented a new restructuring offer on March 19 that adds to the $500 million first offered, according to one person familiar with the proposal.

    Malin and Schapiro would serve as co-chief executives of MGM for a limited period, cutting overhead and producing fewer movies, the person said.

    Hot Tub

    Access Industries, based in New York, has said it would provide an undisclosed amount of cash for new production and reduce MGM’s debt, a person with knowledge of the plans said on March 24.

    Susie Arons, an outside spokeswoman for MGM, declined to comment.

    MGM released one film in 2009 and Hot Tub Time Machine is its sole release this year. The movie cost $36 million to make, according to researcher Box Office Mojo, and grossed $15.6 million in ticket sales its first weekend in U.S. and Canadian theaters.

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  6. MGM studios given fourth debt extension

    By Devin Zydel on 2010-04-01

    The Wall Street Journal – Metro-Goldwyn-Mayer Inc.’s creditors agreed to extend the troubled film studio’s debt deadline on Wednesday as it explores strategic options, like a sale of the company.

    The extension, the fourth such move in the past few months, allows MGM to put off payments on its nearly $4 billion debt load until May 14, according to Susie Arons, an outside spokeswoman for company.

    MGM’s management is expected to present a plan to its major creditors on Thursday that would allow the company to remain a standalone entity, according to two people familiar with the matter. The plan could involve a restructuring in bankruptcy.

    Several investors have expressed interest in helping MGM finance a restructuring. Meanwhile, Time Warner Inc. , billionaire Len Blavatnik’s Access Industries and Lions Gate Entertainment Inc. recently bid to acquire MGM, according to people familiar with the matter, but Lions Gate has signaled that it has left the running.

    Time Warner bid roughly $1.5 billion for MGM, according to people familiar with the matter, but the bids have disappointed many of the studio’s major creditors, and the expected presentation of standalone plan on Thursday suggests the company may be moving away from a sale.

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  7. MGM lenders to meet after underwhelming bids

    By Devin Zydel on 2010-03-31

    Reuters – More than 100 MGM lenders will meet Thursday to decide a course of action in the wake of disappointing bids for the struggling studio.

    A brief additional extension of MGM’s debt forbearance is possible, if only to allow a bit of decorum as a plan is concocted to shift studio ownership from a consortium including Sony and Comcast to the debtholders.

    Further bidding for the entire studio is unlikely, but a handful of investors likely will be asked to make offers on narrow equity stakes as a means of raising operating capital.

    Wednesday is the deadline on a $200 million-plus interest payment by MGM, whose credit facility expires April 8, forcing an additional $250 million payment to lenders. To get past those two deadlines, something like a 15-day extension of the most recent debt-forbearance agreement is envisioned.

    MGM and its consultant Moelis & Co. have asked for a 45-day extension, but lenders seem in no mood to comply.

    “The lenders are frustrated and disappointed with the bidding process,” a lenders-side source said. “They are also frustrated by the existing restructuring proposals, which amount only to pledges to do better.”

    But though attempts to sell the studio outright seem to have hit a brick wall, an eventual restructuring of MGM appears inevitable. Companies keen to assist in the process are expected to meet with Moelis reps and MGM chief Stephen Cooper in an effort to detail investment proposals key to any restructuring.

    Access Industries, Qualia Capital and Anchorage Advisors are among those willing to invest $500 million-$1 billion in MGM to obtain a chunk of studio equity, and News Corp. has signaled a possible interest. A key talking point among the parties: their vision for the future mix and scope of operations at MGM, which somehow must re-capitalize movie production if its large-but-overexploited film library is to grow in value.

    It’s also possible the studio will allow offers for narrowly defined assets, such as the James Bond film franchise or rights to The Hobbit. Sony is interested in the 007 rights, while Warner Bros. would be willing to buy out MGM’s share of Hobbit, which Warners controls 50-50 with MGM.

    Meeting in Los Angeles, a J.P. Morgan-led lenders committee will discuss ways to restructure MGM, with the aim of making a recommendation to the entire lenders group. The debtholders would have about a week to vote, with two-thirds majority needed to approve any plan. Once approved, a restructuring plan would be filed in U.S. Bankruptcy Court. A judge would be asked formally to approve a dramatic debt reduction and to wipe away other outstanding liabilities.

    Moelis tried unsuccessfully in two rounds of bidding to secure offers of $2 billion or more for MGM from other companies such as Warners parent Time Warner, Lions Gate and others. The auction was forced by the Lion’s crushing $3.7 billion debt load and the looming interest and principal payments. Current MGM owners also include Providence Equity, TPG Capital, DLJ Merchant and Quadrangle.

    Separately Wednesday, Disney will conclude an auction of its Miramax specialty film division. The studio also reaped underwhelming offers in a round of bidding set to conclude March 15, until Disney extended the process to month’s end. The studio is running the Miramax auction itself, seeking $700 million for the unit’s 700-title library, but so far it has attracted offers spanning a considerably lower range.

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  8. Lionsgate drops out of MGM bidding

    By Devin Zydel on 2010-03-26

    Variety – The longshot potential marriage between MGM and Lionsgate is off after Lionsgate bailed out of the bidding,
    leaving Time Warner and Len Blavatnik’s Access Industries in the running.

    Lionsgate pulled the plug Thursday after MGM reps asked it to raise its bid, said to be in the $1.3 billion to $1.4 billion range.

    Lionsgate and MGM declined to comment.

    Given its strategy for “not paying retail” and its bitter battle with Carl Ichan, Lionsgate’s exit wasn’t a huge surprise.

    Icahn has repeatedly questioned the viability of Lionsgate’s bid for MGM, asserting that it lacks sufficient financial firepower.

    Earlier this week, analyst Matthew Harrigan of Wunderlich Securities called Icahn’s hostile takeover attempt an “eleplant-sized distraction” for Lionsgate.

    The news increases the odds that MGM’s 140 debtholders will blow off the two remaining bidders since their offers also have been described as well below expectations.

    Instead, MGM could recapitalize through investment bank Qualia Capital with a cash infusion and a debt-to-equity transaction that would allow it to remain a stand-alone entity.

    Lionsgate’s withdrawal comes with MGM debtholders split into two camps‐one that wants to accept the best offer; and the other that wants to prolong the process in hopes of keeping the storied studio alive. A person close to the situation said MGM has asked its lenders to extend the forebearance on debt payments until mid-May.

    Lionsgate’s in the middle of a PR campaign against Icahn, who’s attempting a hostile takeover for the 81% of Lionsgate that he doesn’t own. Lionsgate has called Icahn’s $6 a share offer “woefully inadequate.”

    Lionsgate stock was up a nickel to $6.30 a share in trading Thursday.

    A person close to the situation said the Icahn imbroglio was unrelated to Liosngate’s decision to bail out of the MGM bidding. That source indicated that the decision was consistent with Lionsgate’s traditional strategy of opting for lower-priced opportunistic acquisitions.

    The remaining binding offers for MGM are believed to be in the $1.5 billion range, far below the $2 billion threshold price sought by MGM and its debtholders.

    The first round of bidding generated six non-binding offers, including bids from Liberty Media Corp. and Elliot Management. But declining DVD revenues have cooled interest in acquiring the 86-year-old studio.

    MGM put itself up for sale in November. It acknowledged earlier this week that it had received multiple offers but said that it would take several more weeks to decide whether to accept any.

    MGM also said that it’s expecting to work with its lenders to extend the forbearance period for payment on its bank debt, which ends March 31. The lenders have allowed MGM to skip monthly debt payments since September.

    MGM carries debts of $3.7 billion. It also plans to seek a forbearance agreement for its revolving line of credit, for which a payment is due April 8.

    MGM’s assets include its name and logo, the United Artists operations, a library with more than 4,000 titles, the James Bond franchise, half of The Hobbit franchise and a barebones film and TV operation. Its first title in more than six months, raunchy comedy Hot Tub Time Machine, opens Friday at 2,754 playdates amid muted expectations.

    Time Warner’s been viewed as the most likely buyer for MGM, since it would be able to exploit the film franchises. For Blavatnik, buying MGM would establish him as a certified showbiz player, but one who would probably sell off the rights to James Bond and the Hobbit.

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  9. MGM debt holders object to fire-sale bids

    By Devin Zydel on 2010-03-26

    The Wall Street Journal – Delays are in store in the auction for Metro-Goldwyn-Mayer Inc., as hedge funds controlling big chunks of the studio’s bank debt signaled Wednesday an unwillingness to sell for a lowball price.

    Weighed down by a nearly $4 billion debt load, MGM asked its lenders to grant leniency on debt payments until mid-May as it continues to work on backup restructuring plans that would hand control to creditors, said people familiar with the matter. A forbearance on the studio’s debt is set to run out at the end of the month.

    The move—the fourth time in the past few months that MGM has asked for an extension on debt obligations—represents heightened brinksmanship among the studio’s creditors and suitors. Signaling their willingness to take control of MGM could be a move by creditors to inject more competition into the bidding process and fetch higher prices for the studio with the roaring lion logo.

    The lenders have become increasingly frustrated with MGM’s restructuring process, which has dragged on since November and yielded disappointing bids, according to people familiar with the matter. During a conference call Wednesday, some creditors had hoped to be given a choice between bids for the company or a separate plan that would give them control. Instead, they were told MGM continued to work on the separate plan with other creditors and that the film studio needed yet more time to get a deal done.

    MGM has received only three bids, all at roughly $1.5 billion or less, according to people familiar with the matter. Those making offers for the studio include Time Warner Inc., Lions Gate Entertainment Corp. and Len Blavatnik’s Access Industries. Creditors had been hoping for a figure of around $2 billion.

    MGM declined to comment.

    MGM has crafted a standalone plan in which creditors would convert debt to equity and likely seek a cash infusion from another investor to fund new film production, these people said. Any plan would likely be done through a streamlined bankruptcy process that received approval from many creditors in advance.

    MGM’s best asset is its film library, which boasts more than 4,000 titles and includes the James Bond and Pink Panther franchises. But the library’s cash flow has suffered amid a lack of new releases.

    Some creditors are hopeful that MGM’s latest release, Hot Tub Time Machine, could reinvigorate the library amid early positive buzz. The studio projects the film could take in more than its initial budgeted projections, a person familiar with the matter said. In addition, MGM has partnered with New Line Cinema for two separate Hobbit films, possible blockbuster pre-quels to The Lord of the Rings trilogy.

    Recent developments in the trading of MGM’s bank debt are driving the deal’s current dynamics. Over the past few months, several hedge funds have bought into the studio’s bank debt at around 60 cents on the dollar. Those investments imply the studio is worth about $2.4 billion, well above what current suitors are bidding.

    At least $1 billion of MGM’s bank debt is now held by a small group of hedge funds, said people familiar with the matter. Among the largest holders are Anchorage Advisors and Highland Capital Management, these people said. Apollo Global Management holds a small piece of MGM’s debt.

    Overall, about eight to 10 private investment firms now hold between $300 million and $400 million chunks of the studio’s debt, these people said.

    Many of these hedge funds sit on a steering committee that is negotiating with MGM and its advisers. The two camps met Tuesday to discuss MGM’s most recent bids and are set to convene again next week to continue discussing a standalone plan.

    “We are evaluating joining the steering committee,” said Patrick H. Daugherty, a partner and head of private equity at Highland, in a statement. “And we are certainly willing and able to consider a standalone plan that would provide a full recovery for our investors.”

    News Corp., the parent of 20th Century Fox and owner of The Wall Street Journal, offered to inject cash into MGM in exchange for an equity stake back in January but didn’t hear back, people familiar with the matter have said.

    MGM took on its large debt load in a 2005 buyout that handed the studio to private-equity firms Providence Equity Partners and TPG, as well as media companies Sony Corp. and Comcast Corp.

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  10. Len Blavatnik's Access offers plan to cut MGM studio debt

    By Devin Zydel on 2010-03-25

    BusinessWeek – Billionaire Len Blavatnik offered a plan to reduce Metro-Goldwyn-Mayer Inc.’s debt and provide cash for film production, according to a person with knowledge of the situation, as creditors weigh bids to acquire the studio.

    Blavatnik’s Access Industries, based in New York, would keep MGM operating while cutting the almost $4 billion the studio owes, said the person, who sought anonymity because the talks are private. The person declined to provide specifics.

    Access Industries and rivals Time Warner Inc. and Lions Gate Entertainment Corp. are competing to win over creditors who may propose their own restructuring as their loans drop in value. Time Warner has offered $1.5 billion, a person with knowledge of the auction said this week. Los Angeles-based MGM asked creditors on a conference call today to extend a debt moratorium from March 31 to May 14, two people said.

    “Given the trading levels, it’s logical that the lenders would be unhappy with the bids and would be exploring other options such as restructuring,” said Clark Hallren, managing partner at the Los Angeles-based advisory firm Clear Scope Partners and a former banker with JPMorgan Chase & Co.

    After today’s call, MGM’s $3.7 billion term loans traded at about 49 cents on the dollar, said other people who declined to be identified because the trades are private. The loan fell to 48.1875 cents around 4 p.m. in New York, the people said.

    The price drop suggests debt holders expect to recover less than $1.8 billion.

    ‘Have to Decide’

    “The bank debt is trading at a significant premium over where I think, at least according to the press, where the offers came in,” Michael Burns, Lions Gate’s vice chairman, said today on CNBC. “They’ll have to decide what they want to do.”

    Susie Arons, an outside spokeswoman for MGM, declined to comment, as did Michael Sitrick, a spokesman for Blavatnik. Justin Perras, a spokesman for JPMorgan, which is administrative agent on the loan, also declined to comment.

    MGM, distributor of the James Bond films, put itself up for sale last year after failing to make interest payments on the debt. The studio owns a 4,100-title library and has a co- production deal with Warner Bros. for movies based on J.R.R. Tolkien’s novel The Hobbit.

    The studio was taken private for $5 billion in 2005 by buyers including Providence Equity Partners.

    Time Warner, the New York-based owner of Warner Bros., fell 4 cents to $31.25 at 4:15 p.m. in New York Stock Exchange composite trading. Lions Gate, the independent studio run from Santa Monica, California, gained 26 cents to $6.25.

    Carl Icahn, Lions Gate’s second-largest shareholder, has made a hostile offer to buy the company for $6 a share and is opposed to its interest in MGM.

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