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MGM closes in, again

Seagram may seal deal for PFE

To the surprise of absolutely no one, Seagram Co. and Metro-Goldwyn-Mayer were “very close” Wednesday night to a deal on Polygram Filmed Entertainment.

The two companies are expected to announce today — barring the ever-present last-minute hitch — that MGM has bought PFE’s film catalog for about $250 million.

However, as Seagram and MGM have come this close to a deal at least once before, sources would not rule out the possibility that it could turn sour yet again.

MGM declined comment, and reps for Seagram could not be reached.

While MGM had been prepared to pay $400 million for the entire PFE library two weeks ago, negotiations collapsed (Daily Variety, Oct. 9), only to promptly restart (Daily Variety, Oct. 21). Under the latest arrangement, MGM will purchase PFE’s film titles, and Seagram will dispose of the TV-driven ITC portion of separately.

Thus, MGM’s expected haul will be the Epic library (1,051 titles) plus an uncertain number of PFE pics released before March 31, 1996. According to earlier guidelines drawn up by Seagram and its adviser Goldman Sachs, titles put out since then are not being included.

Under this dating system, the PFE pics in the library should include “Dead Man Walking” and “Four Weddings and a Funeral.” Epic holds ancillary rights to a mixed bag of pics, but counts “Platoon,” “When Harry Met Sally,” “City Slickers” and “The Terminator” among its gems.

PFE paid $225 million for Epic in December 1997, and $156 million for ITC in 1995. The ITC portion contains 350 film titles.

Sources said if MGM does indeed secure the catalog, the Lion will increase its forthcoming rights offering by $200 million to $700 million, partly in order to pay for the deal. The terms of the rights offering will be finalized Friday.