Sony to buy MGM after Time Warner folds

[gaming ultima]

A consortium led by Sony Corp. has agreed in principle to acquire famed Hollywood studio Metro-Goldwyn-Mayer Inc. for nearly $3 billion, MGM said late Monday.

The deal also calls for Sony to assume about $1.9 billion in MGM debt.

MGM said it received a cash deposit of $150 million on Monday from Sony, along with private equity companies Providence Equity Partners Inc., Texas Pacific Group and DLJ Merchant Banking Partners.

MGM said its management will recommend the deal, which it called a "proposed merger" to its board by September 27.

Sony has agreed to pay $12 per share for MGM, 45 cents more than MGM's closing price of $11.55 Monday on the New York Stock Exchange.

Earlier Monday, Time Warner (the parent of CNN) withdrew its bid for MGM, saying the two entertainment firms had failed to agree on price.

Time Warner was offering about $11 a share, or about $4.6 billion.

"Although MGM is a valuable asset, we have decided to withdraw our bid," Dick Parsons, chief executive of Time Warner, said in a statement.

"Unfortunately, Time Warner could not reach agreement with MGM at a price that would have represented a prudent use of our growing financial capacity."

The sale to Sony would mark the third time billionaire investor Kirk Kerkorian has sold the film studio, once best known for its musical hits like "Singing in the Rain" and "Meet Me in St. Louis."

Kerkorian, through his Tracinda Group, owns 74 percent of MGM's outstanding shares. The sale to Sony would net him about $2.1 billion.

Sony is expected to shutter MGM's current production, with the possible exception of the "James Bond" franchise. MGM also produces films under the United Artists label.

But MGM has a considerable library of more than 4,100 titles, including the "Pink Panther" and "Rocky" franchises. Analysts have estimated MGM's library will generate $440 million in cash flow in 2004 by exploiting only 1,500, or about 36 percent, of its titles on the newer DVD format.

cnn
i feel sorry for Toshiba and NEC as HD DVD is most likely going to lose
oh wait no i don’t they should of gave up on it and gone with Blu-Ray
anyway what does everybody else think about it, good or bad?
4.9 billion is a lot but i still think its a good move

[Omega Blue]

im surprized no one has replied to this yet, especially since this news is crucial to Blu-Ray's BIG next step to becoming the next industry standard format. Sony just pwn3d Hollywood. This has almost garanteeing Blu-Ray's victory.

[watashi]

This isn't guarenteeing anything. This just says that Sony bought something, and supposedly Blue-Ray will be used

[Seb]

MGM seem to be a struggling company and to fix that Sony are going to have to invest ridiculous amounts of money. Obviously Sony think that it's worth it, but I'm a little unsure whether it's worth it. I'm sure Sony have done the math, but personally MGM seem like they have been going downhill for quite sometime. Maybe I'm wrong but that's just my perspective. Hopefully this acquisition/merger will help Sony spread the word of their new disc format and allow them to publish films under the Sony brand hence giving the company more exposure and perhaps more sales.

[watashi]

MGM has rights to popular cartoons, I think like 60 episodes of Tom and Jerry, and that's under Cartoon Network, so Time Warner has to buy from Sony and they will make more money I bet...

MGM also has rights to pink panther as stated and other oldies that are good...they will sure invest alot if they make dvd productiosn of them...

Still I believe Sony's buying in it is good...I wouldn't want to see MGM go away forever, they brough Tom and Jerry for the most of it...or they published it...

[Rebon]

MGM has rights to popular cartoons, I think like 60 episodes of Tom and Jerry, and that's under Cartoon Network, so Time Warner has to buy from Sony and they will make more money I bet...

MGM also has rights to pink panther as stated and other oldies that are good...they will sure invest alot if they make dvd productiosn of them...

Arn't we forgetting that little known spytale... known to some as James Bond? That right there is worth much more than Tom and Jerry & Pink Panther combined.

[watashi]

Tom and Jerry is the best! lol...James Bond is widely popular, LOL thinking about it yes this is a good thing at some extent...

James Bond isn't animated as Tom and Jerry is COMBINED! lol

[ps3 Wanna be]

Please could everyone refrain from reporting on this.

It's the Inq, and they are the most unreliable news source ever...in fact, they're on par with GamesRadar.

I'd suggest reading the slashdot comments on the following page:

http://games.slashdot.org/games/06/06/05/0933239.shtml

It shows that the "16Mbps" is perfectly normal.

[luxurys]

I posted the article on the ps3forums to get feedback from people that have technical know how and can help me come up with actual stats that prove their article wrong.