Spyglass co-heads Gary Barber and Roger Birnbaum have signed a non-binding letter of intent to become co-chairmen and CEOs of MGM, according to THE HOLLYWOOD REPORTER. This would be contingent on Spyglass's restructuring plan for MGM, which would erase its $4 billion debt and hand over equity to its lenders. At the end of the deal, Spyglass would hold less than 5% of MGM.

In other news, Qualia Capital principal Ken Schapiro is being eyed as MGM's new COO.

For the Spyglass deal to go through, MGM has to file a prepackaged bankruptcy to the U.S. Bankruptcy Court for approval. However, it is unlikely that the company will be able to do this before Sept. 15 when its lenders are demanding a payment on their debt. MGM will most likely ask for a seventh forbearance in order to get the Spyglass deal, which heavily benefits the 100 plus lenders, rolling.

Spyglass's deal values MGM at $1.9 billion. Warner Bros. previously offered $1.5 billion to buy the company outright.

MGM's current owners — Providence Equity, TPG Capital, Sony, Comcast, DLJ Merchant and Quadrangle — would see their equity in the firm vanish.