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Kirk close to clinch

Sony-MGM deal looms with Dec. 17 vote

MGM will hold a shareholders meeting Dec. 17 to vote on its proposed acquisition by a consortium led by Sony.

Vote is expected to be perfunctory, as controlling shareholder Kirk Kerkorian and his holding companies, which own 69% of MGM, have already agreed to vote yes on the proposal. Lion’s directors and executive officers, who own another 5% of the company, have also indicated they intend to vote in favor of the acquisition, giving it a guaranteed approval of at least 74%.

Meeting will be held at MGM’s corporate headquarters in Century City. Those who owned shares as of Nov. 5 will be eligible to vote.

MGM shareholders will receive $12 per share for the deal.

MGM reached a tentative agreement with Sony and a group of investors, including Comcast, to be acquired for $4.8 billion in September. Comcast and Sony are each investing $300 million as part of the deal. Lion will continue to make several films a year co-financed and distribbed by Sony, which will take operational control of the studio. Comcast will create several channels and video-on-demand options utilizing the combined 8,000-plus pic library of the two studios.

Lion’s board unanimously approved the deal in late September and is recommending that shareholders approve it.

Once approved by MGM shareholders, deal has to be approved by regulatory authorities in the U.S. and Europe. It’s expected to close by mid-2005, although the agreement allows for the deal to be terminated if it’s not completed by Sept. 27, with that deadline potentially extended to Dec. 27 if all requirements have been met save for legal waiting periods.

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