The move by Sahara India Pariwar in making a bid for Hollywood studio Metro-Goldwyn-Mayer (MGM) is not the first such attempt by an Indian company. Earlier in the year, the Anil Dhirubhai Ambani Group's Reliance Entertainment had reportedly attempted to buy the studio but the talks did not materialise.
In the biggest proposed investment by an Indian company in Hollywood, Sahara is in discussion to buy the debt of MGM for around $2 billion (Rs 9,400 crore). It is understood to have talked to mediators for the deal. MGM has about $4 billion in debt.
“Mutual interest discussions are on but they are at a preliminary stage now and it is too early to comment on the issue,” said a spokesperson of Sahara India Pariwar, which owns businesses in media, entertainment, real estate and insurance.
Other suitors
Facing possible bankruptcy, MGM has several suitors, including Spyglass Entertainment, Time Warner Inc and Lions Gate Entertainment Corp. Sahara's talks with MGM are at a time when Spyglass Entertainment has signed a non-binding letter of intent to take over the MGM management.
The letter of intent from Spyglass founders Gary Barber and Roger Birnbaum was signed in the first week of this month. MGM’s debt holders and board of directors are yet to approve the deal. According to The Hollywood Reporter, the tentative agreement with Spyglass values MGM at $1.9 billion.
Meanwhile, activist-investor Carl Icahn, who is fighting for control of Lions Gate entertainment with his 33 per cent of stock, is said to be quietly buying up debt in MGM. Icahn had previously accumulated and then sold off debt in MGM earlier this year.
In the past few weeks, he has already acquired a single-digit percentage in the studio's $4-billion debt. He has also picked up substantial debt in the Blockbuster Inc, the near-bankrupt home-video chain.
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According to the Los Angeles Times, Lions Gate Entertainment Corp has an alternative proposal on the table, to merge with MGM. Warner Brothers’ parent, Time Warner Inc, is also in the queue, with a long-standing $1.5-billion acquisition offer.
Prior to its interest in MGM, Reliance Entertainment had made its Hollywood debut in 2009 by agreeing to invest $825 million in DreamWorks. That includes an investment of $325 million by Anil Ambani to buy a 50 per cent stake in Steven Spielberg's DreamWorks.