Spyglass-MGM deal has $4.5 mil breakup fee

5:31 AM PST 08/24/2010 by Staff report, AP

Cypress Entertainment library to be rolled into MGM

Metro-Goldwyn-Mayer's deal talks with Spyglass Entertainment carry a $4.5 million breakup fee that Spyglass owners would collect in the event the deal falls through, the New York Post reported Tuesday. Breakup fees are not unsual in the deal world and generally guarantee suitors that they are a seller's first choice.

The paper also quoted a source as saying that Spyglass is also "pretty much out of money."

The deal plan calls for Spyglass co-heads Gary Barber and Roger Birnbaum to roll their Cypress Entertainment film library, including films such as "Seabiscuit" and "The Sixth Sense," into MGM, according to the Post. MGM lenders value the company, combined with the Cypress library, at $1.9 billion.

The Post said Time Warner, which has offered to pay about $1.6 billion in cash for MGM, may still be interested at that price, but is waiting on the sidelines for now.
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