Studio expected to ask for sixth extension

The MGM saga looks likely to be prolonged for awhile as it continues its search for a savior.The embattled studio is expected to ask debtholders next week for a sixth extension on its debt payments, according to sources close to the company. MGM had no comment.

The current extension expires July 14. The Lion hasn’t issued a formal statement since May 13 when it obtained a fifth extension — a day before the fourth extension was due to expire.

MGM put itself up for sale last November and drew formal bids by Access Industries, Lionsgate and Time Warner that came in around $1.3 billion to $1.5 billion — well short of MGM’s $2 billion target. The bids from Access and Lionsgate were eventually withdrawn but Time Warner’s believed to still be interested in MGM if it can persuade debtholders to accept a lower price than $2 billion.

During recent weeks, MGM’s believed to have met informally with top execs from Lionsgate, Spyglass Entertainment and Summit Entertainment as possible partners who could run the studio the studio and bring in production funds.

Talks between MGM and Lionsgate have been held off and on for years. And even though Lionsgate’s in the midst of intense battle with Carl Icahn for control of Lionsgate, Icahn hasn’t dismissed the notion of an MGM deal out of hand.

Lionsgate also disclosed in a regulatory filing this year that it had held talks with Icahn last year about possibly combining forces for a takeover bid for MGM but those talks went nowhere. The combination of Lionsgate and MGM would result in a studio with a library of more 7,000 titles.

MGM’s assets include the James Bond franchise and half of “The Hobbit” films, its name and logo, the United Artists operations, a library with more than 4,000 titles and a bare-bones film and TV operation.

MGM’s lone release this year, “Hot Tub Time Machine,” grossed $50 million. Studio’s still planning to release a remake of “Red Dawn” in November and 3D pic “Cabin in the Woods” in January.

Peter Jackson’s been in talks to take over as director for the two “Hobbit” films during the month after Guillermo del Toro departed the project, according to a source close to the situation. Del Toro has blamed the delays in getting a “Hobbit” greenlight on the lack of a resolution to MGM’s ownership situation — an assertion that New Line denies.

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