MGM bids in, spurring second round

Over half-dozen offers are all under $2 billion

MGM has received more than a half-dozen offers to acquire all or part of the studio, with bids forming a sufficiently attractive price range to allow the bidding process to continue to a second round.

Moelis & Co. launched the solicitation process last month on behalf of MGM upon the urging of almost 150 lenders bearing $3.7 billion in Lion debt. Those completing reviews of financial documents include representatives of Warner Bros., Lionsgate, Liberty Media, AT&T, Summit Entertainment, Reliance Big Entertainment, and Elliott Management, a stakeholder in Relativity Media.

Fox was late to the party, and is currently conducting its due diligence.

A source privy to the process said one of the bids received came either from Elliott or Relativity. None of the other companies making offers has come to light as yet, but it's assumed that Warners is in the mix and that Fox will join the bidding eventually.

None of the bids has reached $2 billion, but those in hand are considered sufficiently serious to allow a second round of bidding. It's also now a foregone conclusion that MGM lenders will stretch the Jan. 31 deadline on a big interest payment that's due by the studio.

Twice previously, the lenders postponed the interest-payment deadline to allow the bidding process to get started.

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

JP Morgan Chase is leading a steering committee representing the studio's lenders group.
Entertainment consultant Houlihan Lokey is advising JP Morgan regarding the bidding process and is set to confer with execs of the investment firm regarding bids received to date.

A meeting among members of the lenders steering committee will follow sometime next week.