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Inside Move: Tracking the Lion

Deal takes a turn for the Times

What is it about MGM takeover talk that puts pundits in a twist? Is it the sense of deja vu? The price demands? The stock’s uncanny ability to rise despite the Lion’s limited profits?

For the L.A. Times, which initially refused to give credence to rumors of a serious play by Sony and its financial backers, it may have been all of those things plus the fact that they didn’t know it first.

Certainly columnist Michael Hiltzik’s April 29 assertion that a pre-mature leak to Reuters had run amuck was not far-fetched. MGM is easily the industry’s longest-running takeover saga, so a journo could be forgiven for being skeptical.

Still, it was surprising to find an indignant Times taking its late arrival to the story to the point of asserting that Reuters was “suckered” into an illegal slippage of information intended to boost MGM’s share price.

As it turned out, Sony’s private equity-backed bid was hardly “putative,” as the L.A. Times put it. The conglom has finished a round of due diligence and is seeking exclusive negotiations while MGM has delayed its annual meeting until late June to mull its options.

So the paper this week reluctantly fell back in with the rest of the media and reported that Sony is genuinely interested in a third-party-financed deal to buy MGM.

Gone was the insinuation that MGM had tripped over the fine line between a leak and stock manipulation. After all, MGM stock has always traded in anticipation of some future deal.