India's Sahara in talks on MGM bid
Mumbai, September 19, 2010
Indian conglomerate Sahara India Pariwar is in discussions about buying the debt of struggling film studio Metro-Goldwyn-Mayer for $1.5 billion to $2 billion, according to two people familiar with the matter.
The sources did not elaborate on Sahara India Pariwar's plans for MGM, which has about $4 billion in debt, and stressed that the talks were still at a preliminary stage.
'On mutual interest discussions are on but it's too early to comment on the issue,' said Abhijit Sarkar, corporate communications chief of Sahara India Pariwar, which owns businesses in media, entertainment, real estate and insurance.
MGM could not immediately be reached for comment.
Earlier this month, MGM said that it won extra breathing room to make its debt payments, with its lenders agreeing not to seek remedies for nonpayment of debt until Oct 29.
One source told Reuters that Sahara India Pariwar was contemplating a nearly $2 billion, all-cash deal for MGM's debt. Another source pegged the deal at roughly $1.5 billion.
MGM has a film library that includes the James Bond and Pink Panther franchises, but it has been struggling to create new hits. It is also coping with plunging DVD sales as consumers move to viewing online.
The studio is saddled with debt from a $2.85 billion buyout in 2005 by a group that included private equity firms Providence Equity Partners, TPG, Quadrangle Group and DLJ Merchant Banking Partners, and media companies Sony Corp and Comcast Corp. - Reuters