Inside Move: Sony exex visit Lion’s den

Studios could be discussing structural plan of merger

Sony’s plans to buy MGM may be advancing at a more rapid pace than expected. Sources indicated that Sony Pictures’ top legal exec paid a visit to Lion HQ on Friday with severance plans and information packets.

One legal source said it was unlikely that Sony could legally be on MGM turf mapping out plans so soon, but that it could indicate that negotiations have advanced to the point of discussing actual structural plans for the merger of the two studios.

Sony has been plotting a private-equity backed bid for the Lion — and more specifically, its 4,000 title library — for the past month and half. Last week, Sony chief exec Nobuyuki Idei formally admitted that the Japanese electronics conglom was in the midst of a 20-day exclusive negotiation period to buy MGM. Estimated price is believed to be around $5 billion, including debt assumption. But much of the cash is to be provided by financing partners Providence Equity Partners and Texas Pacific Group, which hope to use the library cash flows to support a heavily debt-financed deal.

Sony did not indicate at what stage its talks were, and some sources insist other potential buyers like Time Warner could still be interested if Sony’s bid falls through at the last minute.