Disney sets Wednesday deadline on Miramax
Colony Capital must make $40 mil down paymentAs the investment group led by Ronald Tutor and Colony Capital nears the deadline to complete due diligence on their $675 million acquisition of Miramax Films, Disney has given them another obstacle to overcome.
Disney wants the buyers to put up a non-refundable $40 million down payment on the deal by Wednesday, according to a report on NYTimes.com Monday afternoon. If they don't agree, Disney could end their exclusive negotiating period and turn to other buyers or pull the 611-film library off the market and proceed with distribution of the handful of unreleased Miramax movies (which they are already in the progress of doing).
Tutor is quoted as saying he will not put up that kind of money unless he is assured the deal will close. According to the report, he also said it will be clear by Wednesday whether they are going forward with their pursuit of Miramax.
If Tutor and Colony falter, there are other bidders waiting in the wings, including Harvey and Bob Weinstein, who have backing from investor Ron Burkle and New York hedge fund Fortress Investments. However, when that group came close to a deal last month, they wanted to pay only $565 million, at which point Disney balked and turned to the Tutor-Colony group, which had been brought to them originally by Pangea Media Group CEO David Bergstein, who remains an advisor on the sale.
Whether Disney does the deal or not will not have a material impact on their bottom line, but it would represent a publicity problem as the sale process has now dragged out for about five months.