You will be redirected back to your article in seconds

Lionsgate re-enters MGM talks

Studio holds informal talks with MGM despite Icahn situation

Lionsgate has re-entered the mix of possible partners for beleaguered MGM.

Informal merger talks between MGM and Lionsgate — which have been held off and on for years — have taken place recently, according to people with knowledge of the situation.

Both companies had no comment. Lionsgate CEO Jon Feltheimer and Vice Chairman Michael Burns, who would probably run the combined studio, have participated in the discussions but haven’t made a formal proposal.

The interest from Lionsgate comes with MGM seeking to survive, possibly via a partnership, as a way of dealing with its massive $3.7 billion debt. MGM’s believed to have met recently with other candidates who could run the studio and bring in production funds, including Spyglass Entertainment toppers Gary Barber and Roger Birnbaum and Summit Entertainment.

For Lionsgate execs, making an official offer for MGM would require that Carl Icahn support such a deal — even though Icahn’s promised a proxy fight for control of the Lionsgate board. Icahn has recently boosted his stake in Lionsgate to 31.8% via a hostile tender offer.

Earlier this year, Icahn criticized Lionsgate management for making an official bid for MGM, believed to be $1.4 billion. Lionsgate withdrew as a bidder in March when MGM asked for a sweeter offer and Time Warner remains the only official bidder.

Lionsgate also disclosed in a regulatory filing this year that it had held talks with Icahn last year about possibly combining forces for a takeover bid for MGM but those talks went nowhere.

The combination of Lionsgate and MGM would result in a studio with a library of more 7,000 titles. MGM’s assets include the James Bond franchise and half of “The Hobbit” films. Lionsgate, which is nearing $2 billion in annual revenues, would bring in a film production operation that focuses on low- and mid-budget projects such as Tyler Perry and “Saw” films with 13 to 14 titles a year; and a TV producing arm that includes “Mad Men,” “Weeds,” “Nurse Jackie”;

MGM put itself up for sale last November. Its debtholders are expected to need at least several more weeks to sort out MGM’s future, which will probably require the company to reorganize in a pre-packaged bankruptcy.

Lionsgate needed only three business days to persuade its lenders to amend terms of the revolving credit facility after Icahn increased his stake in the company to 31.8% through his tender offer. Icahn’s move had placed Lionsgate in the position of a possible default but the company was able to negotiate terms that carry a “favorable” interest rate of the London Interbank Interest Rate plus 2.5% with other key financial terms and provisions unchanged.

Popular on Variety

More Film


    Berlin Winner Manuel Abramovich’s “Pornomelancholia” Taps French Funding (EXCLUSIVE)

    MEXICO CITY — Argentina’s Manuel Abramovich, a 2019 Berlinale Silver Bear winner for “Blue Boy,” has tapped French funding for its follow-up, “Pornomelancholia,” one of the highest-profile projects at Mexico’s Los Cabos Film Festival, which kicks off today with a gala screening of “The Irishman,” Financing from the Region Nouvelle-Aquitaine, a building film-TV hub in [...]

  • CDMX-Film-Pitchbox

    Filmarket Hub Announces Projects for First CDMX Film Pitchbox (EXCLUSIVE)

    When Variety unveiled the CDMX Film Pitchbox, a new movie project pitching forum that will take place in Mexico City on Nov. 29, organizer Filmarket Hub announced that executives from Alazraki Entertainment, Cinema 226, Cinépolis, Lemon Studios, Perro Azul and VCS Capital had already confirmed they would attend. Since then, Dynamo, Endemol Shine Boomdog, Exile Content Studio, [...]

  • Flora y Fauna

    Los Cabos Pix-in-Post Draw Picture of a Troubled Mexican Nation

    MEXICO CITY —  A portrait of age-old custom (“Gods of Mexico”), a troubled mother-son relationship (“Summer White”) and three film which came in at Mexico’s heart of darkness – its violence – from different angles, shape a Work in Progress section at this year’s Los Cabos which could hardly be more concerned about the current [...]

  • The Sweeties

    China's Phoenix Buys Italian Body-Positivity Comedy 'Sweeties'

    Chinese distributor Phoenix Entertainment Group has bought all China rights to the Italian comedic drama “The Sweeties” from Germany-based Media Luna New Films. The movie is the second feature from director Francesco Ghiaccio and stars Valeria Solarino, Vinicio Marchioni and four young newcomers in their acting debut. It deals with issues of bullying and body-shaming [...]

  • The Upside TIFF

    'The Upside' Poised for China Theatrical Release

    “The Upside,” a 2017 American remake of the 2011 hit French drama “The Intouchables,” will get a China release on Nov. 22. The film was directed by Neil Burger and stars Nicole Kidman, Kevin Hart and Bryan Cranston. It tells the story of an unlikely friendship that forms between a rich quadriplegic and the struggling [...]

  • Editorial use only. No book cover

    Virginia Leith, Female Lead in Stanley Kubrick's First Film, Dies at 94

    Actress and model Virginia Leith, who starred in Stanley Kubrick’s first film “Fear and Desire,” which he later disavowed, has died. She was 94. According to family spokesperson Jane Chalmers, Leith died after a brief illness at her home in Palm Springs, Calif. on Nov. 4. Born on Oct. 15, 1925, Leith met Kubrick in [...]

  • Sarah Bolger's 'A Good Woman Is

    Film News Roundup: Sarah Bolger's 'A Good Woman Is Hard to Find' Bought by Film Movement

    In today’s film news roundup, “A Good Woman Is Hard to Find” and “After Parkland” find homes, Jack Johnson is honored, AGC closes deals on Neill Blomkamp’s latest and Paramount is in talks for a “Power to the People” project. ACQUISITIONS Film Movement has bought North American rights to the thriller “A Good Woman Is [...]

More From Our Brands

Access exclusive content