News Corp, owner of the Twentieth Century Fox film studio, is at an impasse in talks on a possible bid for Metro-Goldwyn-Mayer Inc, according to a person with knowledge of the situation.
News Corp, based in New York, is balking at terms closely held MGM is seeking from potential bidders ahead of a formal auction, according to the person, who asked not to be identified because the talks are private.
Burdened by about $4 billion in debt, Los Angeles-based MGM put itself up for sale last month. Creditors hope to get at least $2 billion from a single buyer or sell assets separately, people with knowledge of the situation said in November.
News Corp objects to provisions of a non-disclosure agreement that could subject the company to legal liability, the person said yesterday. Chris Petrikin, a spokesman for Twentieth Century Fox, declined to comment. Susie Arons, an outside spokeswoman for MGM, said she couldn’t comment on individual negotiations. MGM is controlled by Providence Equity Partners Inc and TPG.
Comcast Corp. and Sony each own 20 per cent, while DLJ Merchant Partners holds 7 per cent and Quadrangle Group holds 3 per cent.
Led by Providence, the group bought MGM for $5 billion in 2005. Sony and Comcast have written off their investments.
Time Warner Inc, News Corp and Qualia Capital LLC are among the parties that may be interested in MGM, owner of the “James Bond” franchise and a library of 4,100 films, people familiar with the situation said last month.
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Lions Gate Entertainment Corp expressed interest in purchasing MGM at a November 12 conference in New York, and Liberty Media Corp Chairman John Malone said his company would look at the studio.
News Corp, the media company controlled by Chairman and Chief Executive Officer Rupert Murdoch, gained 13 cents to $13.35 on Friday in Nasdaq Stock Market trading. The Class A shares have advanced 47 per cent this year.