But only at an exorbitant price

Metro Goldwin Mayer (MGM), the last major independent film company, was up for sale, it was reported Tuesday. The owner of 80% of the shares, Kirk Kerkorian, entered into a contract with the investment bank Goldman Sachs to provide consulting services on the transaction. Mr. Kerkorian wants to gain at least $7 billion from the sale, although, according to experts, the company is not worth more than $5 billion.

Among the potential buyers of Kirk Kerkorian's company are such media monsters as Viacom, Vivendi Universal, Sony, AOL Time Warner, Walt Disney, Dreamworks SKG, as well as Rupert Murdoch's News Corporation. In recent months, MGM management, together with experts from Goldman Sachs, has been conducting informal negotiations with possible buyers, but only at the beginning of the week did information about the sale of the company leak to the media. However, representatives of the film company said that “so far no agreements have been reached on a possible deal.”
MGM was founded in 1924, and many of its 4,100 films in its catalog are considered classics of American commercial cinema: Ben Hur, Gone with the Wind, Mutiny on the Bounty, The Wizard of Oz, Midnight Cowboy, Doctor Zhivago ", animated series "The Pink Panther". The studio also owns the right to produce films about James Bond, which is franchised to other companies. However, in recent years, MGM has not released a single blockbuster: the independent company has found it difficult to compete with film studios such as Warner Bros. or Universal, part of large concerns. However, the studio's shares are rising in price, and its earnings are exceeding analysts' estimates: in the final quarter of last year, MGM's revenues amounted to $12.4 million on profits of $292.2 million.
Mr. Kerkorian now owns 80% of MGM, which he bought in 1996 from Credit Lyonnais for $1.3 billion. The eccentric billionaire then acquired the company for the third time, having bought and sold it twice in the past. Now 84-year-old Mr. Kerkorian is the largest shareholder of the DaimlerChrysler concern, he owns the Mirage Resort hotels in Las Vegas, the Orion Pictures film studio and the rights to the Polygram Pictures film catalog, as well as four American national cable television channels. He is considered a talented investor, equally merciless to competitors and partners, as well as a strange and unsociable person.
According to experts, Mr. Kerkorian wants to artificially increase the price of his company and then put it up for auction. That's why he doesn't agree to price MGM shares below $30, although they currently cost just over $22 on the New York Stock Exchange. Potential buyers are also deterred by the fact that Kirk Kerkorian wants to retain the right to make decisions at MGM for several years after its sale.

IVAN Kommersant-FEDIN

Newspaper "Kommersant" No. 6 dated January 17, 2002, p. 5

Kirk Kerkorian ready to sell to MGM