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August 25, 2008

No, but Really: MGM Isn't For Sale

UPDATE: My thanks to Defamer for this genius graphic of the battle of the titans about to happen (not, sorry guys). Waxmanfinke But I found it hilarious!

Ron Grover at BusinessWeek and Nikki Finke are convinced that MGM is for sale, and are reporting as much. MGM took the unusual step of issuing an official, strong denial earlier today:

"Contrary to recent media reports, Metro-Goldwyn-Mayer Studios Inc. (MGM) is not for sale. There is no 'asking price' for the company.  MGM's existing financing arrangements are sufficient to meet its needs.  Goldman, Sachs has been retained to explore enhancements to MGM's long-term capital structure."

So I wanted to know what the hell that meant -- "enhancements" to the "capital structure"? Finke says that this still means a sale. It doesn't really sound like it to me. I'm told from inside the studio that Goldman Sachs was in fact retained to help the studio come up with solutions to its debt problem - a matter that only looms seriously in four years time - but emphatically not to broker a sale.

Still, rumors - even false ones - have a way of taking on lives of their own. Just a week ago or so, MGM executives were hinting that a new round of $500 million in film financing was about to close. I wonder if this talk of a sale, true or not, will affect the conclusion of that capitalization.

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