Offers range from $300-500 million
Artisan Entertainment and Canal Plus have teamed up for one of the three bids to be lodged for Polygram Filmed Entertainment.
As expected, the other two bidders were Carlton Communications and Metro-Goldwyn-Mayer. The offers, which came in late Friday night, ranged from $300 million to $500 million, excluding debt.
Both Artisan/Canal Plus and Carlton made offers for all of PFE, while MGM bid purely for its 1,500-title library.
Reflecting the partial nature of its bid, the Lion is believed to have offered about $300 million. MGM declined comment.
The bids followed an intense period of discussion about possible alliances involving all of the bidders. Artisan and Canal Plus’ joint effort came together at the eleventh hour, sources said.
U.K. media group Carlton appears to have been the only single bidder to make an offer for the whole of PFE.Meanwhile, Sunday newspapers in London reported that former Polygram holdings chief executive Alain Levy was attempting to put together a lastminute bid for the company, following the withdrawal of music giant EMI from the auction.
People close to the situation predicted that none of the bidders looking at the whole company would pay more than $450-500 million for the equity, making the total value of the offer $750-800 million, including Polygram’s off-balance sheet film produc-tion debt.
Assuming that the offers from Artisan/Canal Plus and Carlton substantially exceed MGM’s, the auction is set to become a two-horse race. At this stage, the Lion’s chances of nabbing just the catalog look pretty slim.
Although few details were available over the weekend, most of the offers were highly conditional. That’s not surprising because most bidders felt they did not have enough time to do due diligence on PFE.
Sources indicated that the relative values of the bids will take several days to analyze, particularly as today is Rosh Hashanah. The outcome of the auction probably won’t be known for another two weeks.
Seagram CEO Edgar Bronfman Jr. would rather sell PFE than fold it into Universal, but he could change his mind if the offers are too low.
Canal Plus is known to favor securing distribution rights in certain territories to both PFE’s library and its new product. The French programming giant has pay-TV outlets in 13 European territories, including the key French, Italian and Spanish markets.
Although it is already a partner in European film distributor C+P, a joint venture with Jerome Seydoux’s Pathe group, Canal has shown some interest in the PFE distribution network outside the U.S.
Last week, C+P signed an output agreement with Mandalay Pictures. Seydoux went on record Thursday to say that he is not interested in PFE but that if Canal Plus was part of a winning bid, he would then hold talks with Canal Plus chairman Pierre Lescure.
Lescure cool to U.S.
For his part, Lescure has repeatedly said that the U.S. side of Polygram’s business is not of interest to his group, and that he would not consider paying more than $500 million for PFE.
A partnership between Canal Plus and Artisan would naturally lower the financial commitment of each company, but it is unclear how they would divide the spoils. The two partners are thought to favor a limited dismantling of the company and the imposition of their own business plan.
That leaves Carlton as PFE president Michael Kuhn’s best chance for keeping the company and its expansion plan intact. Carlton’s plans for PFE are unclear.
(Michael Williams in Paris and Adam Dawtrey in London contributed to this report.)