Report: Time Warner, News Corp. circle MGM

Sony, Qualia Capital may also be in the hunt

NEW YORK (Reuters) - News Corp, Time Warner Inc and Qualia Capital LLC are interested in buying Hollywood's Metro-Goldwyn-Mayer film studio, home of the James Bond movies, Bloomberg News reported on Friday.

Citing people with knowledge of the situation, the report said the companies have not yet examined the studio's finances and their level of interest will depend on price.

Burdened by about $4 billion in debt, Los Angeles-based MGM said last week it was weighing options, including a possible sale of the company.

Creditors are hoping to get at least $2 billion, from a single buyer or by selling the assets separately, Bloomberg said.

Its sources also said Sony Corp may also be interested in all or part of the studio.

News Corp, MGM, Sony Pictures Entertainment, Time Warner and Qualia, a closely held media and entertainment investment company, all declined comment, the report said.

A week ago, MGM said it was exploring a potential sale of the company as lenders extended a forbearance until January 31. It said its other options include operating as a stand-alone entity or forming strategic partnerships.

A source familiar with the matter told Reuters the company was expected to open its books to interested parties in a process that could take months.

The studio, which has enlisted a restructuring specialist to help turn it around, faces debt obligations of $3.7 billion stemming from its 2005 buyout, plus payments on a $250 million revolving credit facility due April 2010.

It was purchased from majority owner Kirk Kerkorian for $2.85 billion by a group including private equity firms Providence Equity Partners; TPG; DLJ Merchant Banking Partners, a unit of Credit Suisse; and Quadrangle Group; and media firms Sony and Comcast Corp. The group also assumed a debt of $2 billion.
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