Sony to Buy MGM for $5 Billion?
Created 04/20/2004 - 23:00
Word has leaked out that Sony Corp. is in talks to buy Metro-Goldwyn-Mayer Inc. for a cash deal valued at approximately $5 billion, according to AP and other news organizations. Sony and two private firms, Providence Equity Partners and Texas Pacific Group, have been examining MGM's books in anticipation of an offer that might take place in several weeks.
A deal would likely fold MGM into Sony Pictures Ent. and expand Sony's film library with an additional 4,200-plus titles, including lucrative United Artists franchises such as James Bond and the Pink Panther.
Late Wednesday, MGM announced that its board will vote next week on management's recommendation to pay a one-time special dividend of $8 per share, which would provide a $1.4 billion windfall to investor Kirk Kerkorian, who owns 74% of the company.
News of the talks sent MGM shares surging nearly 12% on Wednesday, or $2.10, to close at $19.75. The stock gained another 5 cents in after hours trading.