Brothers sweeten $600 million bid for Miramax
Just as Disney was starting to weigh the three offers it received for Miramax Films last week, a sweetened offer from the Weinsteins showed up on the Mouse House chief’s doorstep over the weekend.
The brothers’ bid is backed by supermarket magnate Ron Burkle and his investment arm Yucaipa Cos., as well as Fortress Investment Group and Colbeck Capital Management. Previously, as much as $100 million was expected to be paid back as a loan, through terms of last week’s bid.
Worried that they may not win back the speciality label they named after their parents Miriam and Max, Bob and Harvey Weinstein have converted a $600 million offer to cash, rather than a series of payouts earned from revenue generated by Miramax’s roughly 700-title library over the next several years.
Harvey Weinstein and a rep from Yucaipa Cos. met with Disney chief Bob Iger at his Brentwood home over the weekend to discuss the new deal, according to sources familiar with the talks.
The Weinsteins began showing signs of frustration last week when rival bids led by Alec and Tom Gores and Pangea Media Group’s David Bergstein put them in a precarious position of losing out on buying back Miramax, which they formed in 1979 and sold to Disney for $80 million in 1993. They walked away from the company in 2005 when they formed the Weinstein Co.
The Gores brothers, through the Gores Group and Platinum Equity, are offering $550 million in cash, while Bergstein’s $650 million cash bid is backed by a Saudi investor and Deutsche Bank, among others. Bergstein, who finds himself dealing with an involuntary bankruptcy proceeding, is advising the group.
The Miramax library consists of 611 movies (including direct-to-DVD titles) and 220 hours of TV episodes. The Weinsteins already retain the right to reboot 25 titles, including “Scream,” “Scanners” and “Halloween,” as part of a 2005 deal with Disney. The library is said to pump out $100 million in revenue — a figure that could drop to $25 million five years from now if new titles aren’t added to the list of pics, analysts say.
Should Disney accept the Weinsteins’ offer, the deal would easily become Burkle’s biggest investment in Hollywood.
While the billionaire, who is worth $3.2 billion, according to Forbes, has a high profile in town, the $9 billion that Yucaipa Cos. controls has mostly been made from investments in supermarkets and as an owner of temperature-controlled warehouses.
Just why Burkle is interested in Miramax is unknown.
Burkle seldom talks to the press. But in a rare interview last month, he told Business Week, “We always try to buy companies that are doing OK but that have some issues. We buy at a price that if they just muddle through, we don’t go broke. And if they do better, we make a lot.” Burkle previously invested $50 million in Al Gore’s Current TV channel.