Lionsgate and MGM have reentered merger talks, reports VARIETY.
Lionsgate and MGM have reentered merger talks, reports VARIETY. Lionsgate CEO Jon Feltheimer and Vice Chairman Michael Burns were part of the negotiations, but no offer has been made. The beleaguered MGM has also had recent talks with Spyglass Ent. heads Gary Barber and Roger Birnbaum and Summit Ent.
The problem for Lionsgate is that any deal would need to be approved by its activist shareholder Carl Icahn, who now holds 31.8% of the company. Icahn has been waging a hostile take-over bid, as well as a proxy fight. The top shareholder believes Lionsgate's board and directors are taking the firm into financial ruin. Icahn was critical of an earlier $1.4 billion bid for MGM.
MGM is being pulled down by its $3.7 billion in debt. If the studio cannot find a financial partner or be sold outright in the next few weeks, its debtholders are planning a pre-packaged bankruptcy for the company.