Anil Ambani's Reliance to buy the Prestigious MGM studios?
After tying up with Steven Spielberg’s DreamWorks last year, India’s Reliance ADA Group is eyeing a purchase of another Hollywood studio, Metro-Goldwyn-Mayer. But the Indian company isn’t willing to pay anything close to what MGM is seeking, a person familiar with the matter said.
MGM, which is struggling with $3.7 billion in debt stemming from its 2005 leveraged buyout, has extended first-round bids beyond this week as it tries to galvanize more interest in its assets, the person said.
People familiar with the talks said earlier this week that bids are in the $2 billion range, far below what MGM owes its lenders. Some could come in below $1.5 billion, they said.
The main draw for Reliance and other bidders is MGM’s library of film titles. The library, which includes the James Bond and Pink Panther franchises, generates roughly $300 million in revenue, depending on who’s doing the estimating.
It isn’t clear whether Reliance will submit a bid. But if it does, the Indian company sees itself in a strong position to bargain on price, said the person familiar with the matter. Reliance views MGM as a distressed asset, given that the studio is facing a key Jan. 31 deadline for debt repayment when its forbearance agreement with lenders expires.
Reliance, a conglomerate backed by billionaire Anil Ambani that has interests ranging from media to energy, distributes movies in India like the current hit “3 Idiots.” But it wants more Hollywood content for its film arm, Reliance Entertainment, and hopes to earn much larger sums in the U.S. than are possible in India. It has struck movie development deals with actor-producers including Brad Pitt and Jim Carrey, and is building a facility in Mumbai to convert Hollywood feature films into 3-D format.
Reliance’s deal with DreamWorks closed last August. The Indian company injected $325 million in equity, while banks put up a matching amount of financing and Disney contributed a $175 million loan. Shooting started in October on the first movie under the partnership, “Dinner for Schmucks,” which stars Steve Carell.
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- Guest 9 years ago
The world's most distinguished and respected brand in Entertainment, MGM Studios is looked upon by Indian conglomerate, ADAG's Big Pictures is a news to be proud of or not is BIG dilemma. Indeed it is, because the Indian brand is certainly among the list of companies where an employee's hard work is not valued at any level of organization but the CHAMCHAS are praised.
Gone are the days, when Dhirubhai Ambani led the united Reliance and won a billion hearts and had an eye for employing right candidate in the company. But it is not the case now.
Nothing to boast about if it is bought by the Indian company.