The vote is in and it’s bye-bye to an independent Lion in a landslide.
MGM shareholders Friday voted 99.8% in favor of the planned $4.8 billion acquisition of their company by a consortium led by Sony that includes Comcast and a group of private equity funds.
Shareholders’ meeting at MGM headquarters in Century City was largely perfunctory, as controlling owner Kirk Kerkorian indicated he would vote for it with his 69% stake months ago. Executives and board members who own an additional 5% of shares had promised to vote in favor as well.
Modestly attended meeting lasted just eight minutes and didn’t contain a single question about the acquisition deal or other topics.
Shareholders representing 219 million shares, or about 92% of MGM’s total outstanding equity, cast votes.
“It is our understanding the consortium intends to continue to operate MGM as a separate entity with strong partnerships and alliances with Sony in co-production of theatrical motion pictures and worldwide distribution of content and with Comcast in establishment of new channels featuring both Sony and MGM content,” Alex Yemenidjian told the meeting in describing Lion’s future. “Therefore, MGM will continue to be a thriving independent company and a vibrant and important player in this industry.”
Following the meeting, Yemenidjian explained that the next step will be for MGM and Sony to form transition teams early next year that will start to put together detailed plans for the integration of MGM. Lion will remain an independent company controlled by Sony, Comcast, and other investors, but operational control will fall to Sony.
Among the transitions teams’ tasks will be figuring out how many MGM employees will stay on folllowing the deal’s close, which is expected to take place mid-2005 following regulatory approvals.
Yemenidjian described the meeting as “bittersweet,” explaining that he and vice chairman Chris McGurk had hoped to transform MGM into a major Hollywood player by acquiring the entertainment assets of Vivendi Universal last year. But when they lost that contest to General Electric, MGM turned from acquirer into acquiree in the ongoing consolidation of big media.