Studio following through on its truce with Icahn
Following through on its 10-day truce with Carl Icahn, Lionsgate has been meeting with MGM debtholders about a possible merger.Neither company confirmed the talks, first reported Tuesday by the Los Angeles Times, but a knowledgeable source indicated that a meeting had taken place. MGM’s expected to announce a sixth extension of payments on its $3.7 billion in debt on Wednesday when the current extension expires. Liongate has been in informal talks about an MGM-Lionsgate merger in recent weeks. A combined MGM-Lionsgate would include a library with more than 7,000 titles and the ability to produce and distribute MGM titles — such as new James Bond movies and the two “Hobbit” films, which MGM co-finances with New Line. Lionsgate’s truce with Icahn expires Monday but could be extended. MGM has also informally discussed scenarios in recent weeks with execs from Spyglass and Summit under which MGM would recapitalize via a prepackaged bankruptcy.
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