Attempt is investor's third this week

With MGM debtholders facing a fast-approaching deadline, Carl Icahn’s made another offer to MGM debtholders — his third approach to that group in a week.

The Icahn offers are designed to block a proposed pre-packaged bankruptcy deal that would leave Spyglass Entertainment in charge of the Lion. MGM debtholders, who hold about $4 billion in debt, must decide whether to back the Spyglass plan by Friday.

Icahn disclosed Wednesday that he’s been buying MGM senior debt at a price of 50 cents on the dollar and has obtained a “substantial” amount. The billionaire investor said he’s seeking to acquire an aggregate of $500 million in senior loans.

MGM had no immediate response.

Icahn had announced Tuesday a separate offer to buy $1.6 billion in secured loans at 53¢ per $1 principal amount. He’d also announced a week ago his first offer to buy some $963 million in debt by guaranteeing to debtholders that they will receive at least 45¢ on the dollar as long as they agree to vote against the proposed merger with Spyglass.

Icahn is supporting a rival plan by Lionsgate, in which he owns 33%, to merge MGM with that mini-major.

The Spyglass plan, which has been supported by some of MGM’s creditors, would place the studio into a pre-packaged bankruptcy, wipe out the equity and leave debt owners with a 95% stake, with the remaining 5% going to Spyglass.

The Lionsgate proposal would combine the two studios and give MGM debtholders a 55% stake.

Spyglass toppers Gary Barber and Roger Birnbaum have refused to comment on the latest series of offers for MGM. Under the Spyglass plan, Barber and Birnbaum would manage the merged company upon exiting bankruptcy, a process expected to take about 30 days once the filing is made.

Lionsgate said in a regulatory filing that it could reduce costs by $100 million and boost cash flow by $400 million over the next six years if the debtholders would instead approve its own merger with the storied studio (Daily Variety, Oct. 26).

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