Thursday, April 22, 2004 at 07:00 JST
LOS ANGELES — Sony Corp is in talks to acquire film studio Metro-Goldwyn-Mayer Inc in a cash deal valued at around $5 billion, a source familiar with the talks said Wednesday.
Sony would join with private equity firms Texas Pacific Group and Providence Equity Partners to buy the legendary studio, the source said.
Sony would likely fold MGM into its Sony Pictures Entertainment division. It is not known what would become of the MGM and United Artists labels.
Sony is likely interested in acquiring MGM's library of more than 8,000 titles, including the "Pink Panther" series.
MGM has been shopping itself around for nearly two years, seeking to become larger either through an acquisition or merger.
The company, which is 74% owned by billionaire Kirk Kerkorian, made an unsuccessful bid for Universal Studios last year. Unable to strike a deal, MGM said recently it would pay a one-time special dividend of $8 per share, which would net a $1.4 billion windfall for Kerkorian.
Late Wednesday, MGM reaffirmed its plans to have its board vote as early as next week on management's recommendation to pay the dividend. Earlier reports had speculated MGM would defer the dividend in view of the Sony offer.
If the deal goes through, it will reunite MGM with the backlot it once owned and where historic films such as "Gone With the Wind" were shot. MGM sold its backlot to Sony years ago. The company is the only major studio without its own soundstages or permanent sets.
MGM has struggled with its feature film slate in recent years, producing occasional hits such as "Legally Blonde" and "Barbershop." It also produces the popular "James Bond" series of films. (Wire reports)
