After news earlier today that Warner Bros. had withdrawn their bid to purchase Metro-Goldwyn-Mayer Inc. based on word that Sony Corp. raised its offer for the studio to nearly $5 billion we now learn that has more validity than earlier speculated as Sony Corporation of America and its equity partners, Providence Equity Partners, Inc., Texas Pacific Group, and DLJ Merchant Banking Partners, today confirmed it has agreed in principle to acquire MGM for $12 in cash per MGM share, plus the assumption of MGM’s debt.
At the same time, Sony Corporation of America and Comcast Corporation announced that Comcast, Sony Pictures Entertainment and the equity partners in the MGM transaction have reached agreement on a broad programming and distribution arrangement. It will allow for the distribution of Sony Pictures’ and MGM content on Comcast’s video on demand platform, and for the creation of a joint venture, to be managed by Comcast, establishing new cable channels featuring Sony and MGM content. While this agreement contemplates consummation of the acquisition of MGM, the parties will proceed with Sony content on a stand alone basis for VOD under any circumstances.
In addition Comcast is considering becoming a minority equity investor in the proposed MGM acquisition.
JP Morgan is acting as lead arranger for all of the debt financing and CSFB is a co-underwriter. CSFB in addition to JP Morgan and Citigroup are acting as advisors to the consortium.
