EXCLUSIVE
The game for Miramax has reached a critical decision point for David Bergstein and his partner Ronald Tutor, TheWrap has learned.
Tutor, a construction magnate with close to $1 billion to play with, must now decide if he is ready to write a check to close the deal for Miramax at $650 million without the support of a bank to provide debt financing.
That's because thus far, the banks approached by Tutor and Bergstein have not been willing to accept the high-flying valuation on the Miramax library they are advancing in order to meet the number demanded by Disney, according to individuals with knowledge of the situation.
For months, the troublesome issue of valuation has been the fly in the ointment of this sale, and it will now determine the outcome of the Bergstein-Tutor bid.
Tutor can pay cash, and buy his way into Hollywood.
Or he may decide that he won’t move forward without the support of a bank.
And with the negotiating window now expired, this decision will determine whether one more buyer falls out of the bidding process.
How bad does the building magnate want it? That essentially is the question, and it is the same one faced by another L.A. billionaire, Ron Burkle, a few weeks ago.
In his case, the answer was: not bad enough.
The Walt Disney Company had sought $700 million for the 700-film Miramax library, leaving the fate of modern Hollywood gems from “Pulp Fiction” to “Shakespeare in Love” hanging in the balance.
Bergstein and Tutor had previously bid upward of $650 million. But the deal has still not closed.
In an attempt to help Tutor land a partner bank, Disney last week reached out to Mesa Capital, an investment advisor firm that had been working on the Miramax valuation for another potential buyer.
Mesa did not respond to requests for comment. Neither did Bergstein, Disney or Miramax.
Bergstein has said he has two other equity partners from abroad, but they have not been disclosed, and are not believed to be front-and-center in the negotiations.
At this point, Tutor, 69, has the ability to write the check. But paying cash with no debt financing would be highly unusual and, according to most financial analysts, add a huge amount of risk to the investment.
The previous bid for the library, by Harvey and Bob Weinstein and their billionaire backer Ron Burkle, fell through over the valuation question.
Burkle cut his bid to $565 million from more $625 million because of the results of the financial analysis.
One possible alternative might be having Tutor and Bergstein pair up with the Weinstein brothers and Burkle.
But thus far that is not happening. The Weinsteins, in addition to wanting to regain ownership of the library that bears the name of their parents, retain ownership over half of the remake rights to 15 choice Miramax franchises.
