A year after purchasing Miramax for $663 million, Colony Capital has shored up its financing for the film company that has been valued at more than $813 million as it prepped for the bond offering.
Miramax had planned to raise $550 million through securitization; the company solidified that asset-backed bond offering Wednesday night at $500 million, sources close to the transaction confirmed to Variety. That means the deal will likely close within the week, with Bloomberg News reporting that it will bring a hefty dividend payable to Colony.
With Miramax now on the path to firm financial footing, Colony is said to be casting its eye on another potential acquisition target, Summit Entertainment. It’s not clear whether Miramax will use some of its securitization coin for production, a question observers have speculated about in the weeks surrounding the deal. Film-backed securitizations are rare, and even more rare if the companies involved are not promising to deliver new content. But Miramax execs have kept their options open, including a partnership with the Weinstein Co. to produce sequels to films including “Shakespeare in Love,” “Rounders” and “Bad Santa” soon after taking charge.
The securitization deal used an independent evaluation by financial services firm Duff and Phelps that pegged Miramax’s total worth at more than $813 million as of July 1, 2011.
As Colony settles its plan for Miramax, the private investment firm headed by Tom Barrack emerged as a possible suitor for Summit. If Colony is serious about its pursuit of the Summit, it will set up a potential rivalry with Lionsgate, which has been flirting with some kind of combo with Summit since 2008.
Reps for Summit and Colony Capital declined to comment, but people familiar with the situation said that Colony and Summit have been in talks about a possible deal in recent weeks.
News of the Lionsgate negotiations with Summit re-emerged earlier this week — although neither company has officially confirmed — with Lionsgate having engaged JP Morgan as an adviser.
Either deal would bolster Summit’s ability to operate as a minimajor, in that both suitors possess far larger libraries than Summit’s. According to Miramax’s preliminary offering agreement obtained by Variety, Miramax’s owners are banking on healthy digital and television exploitation of its library assets.
Miramax execs have spent the last year combing through hundreds of boxes in a warehouse in Los Angeles containing the details of about 650 projects developed under the previous regime. They’ve also been busy inking digital distribution deals with players including Netflix, Hulu and Facebook; according to the offering agreement, the company has a total of $127 million in contracted digital arrangements. Lionsgate for years has been active in exploring acquisitions while stressing that it won’t overpay. It’s had discussions with Summit about uniting going back as far as the fall of 2008, just before the bow of the first “Twilight” pic and had on-again, off-again talks about a merger with MGM as well.
Privately-held Summit announced Tuesday that “The Twilight Saga: Breaking Dawn — Part 1” had hit $508 million in worldwide box office in its first 12 days. The final “Twilight” film will open Nov. 16.