Three full days after a deadline expired on March 31, three bidders submitted offers on Monday to buy the debt-strapped studio, MGM.
The three bidders were known to be Time-Warner, Lions Gate Entertainment and a Hollywood newcomer, Access Industries.
Of the three, Time-Warner bid the last - late Monday afternoon - and submitted an all-cash offer of $1.5 billion, according to one knowledgeable individual.
The strength of that bid indicated Time-Warner's fervent desire to acquire the studio, with its 4,100-title library, which includes the lucrative James Bond franchise and half of the epic project, "The Hobbit" (Time-Warner already owns the other half.)
But it was not clear that even an offer like that, or higher, would satisfy MGM's lenders, who preside over $3.7 billion in debt. They had been seeking $2 billion for the studio. With the debt trading at about 60 cents, the company was still worth on paper more than $2 billion.
But potential buyers were stymied at justifying that pricey a value for MGM, in a climate where declining DVD sales has undermined the value of MGM's vast library.
None of the bidders would comment, but MGM issued a statement late Monday afternoon acknowledging having received "a number of bids."
Clearly the studio would not be in a hurry to respond to those bids. In the same statement, MGM said that it was seeking to extend a March 31 deadline of forbearance on interest payment from debtors, along with "a forbearance agreement for its revolving line of credit, for which a payment is due April 8."
So finally MGM has some options, while potential buyers will have to wait weeks for a decision.
Previously: Valuation Expert Seth Willenson Says MGM Price Too High
Update Monday at 4:45 pm:
MGM issued a statement acknowledging receipt of an unspecified "number of bids" to buy the studio, three days after its formal deadline passed for those bids.
Lionsgate and Access Industries submitted their bids, and Time-Warner submitted its offer on Monday afternoon, according to knowledgeable individuals.
The Time-Warner bid came in at the high end of its planned offer -- an all-cash bid of $1.5 billion, according to one individual close to the deal.
Meanwhile, MGM also announced that it expects to extend the looming interest deadline with lenders beyond March 31.
The studio, which carries $3.7 billion in debt, has negotiated deferred interest payments multiple times with its debtors, and clearly needs to do so again.
In a news release Monday afternoon the studio said:
“MGM said today it has received a number of bids as part of its ongoing process of exploring strategic alternatives, which include continuing to operate as a standalone entity and evaluating a potential sale of the Company.
"The Company will review the bids and related transaction terms over the next several weeks.
"As part of its efforts to strengthen its financial position and to facilitate the Company’s strategic review process, MGM also said today it expects to work with its lenders to extend the current forbearance period on its bank debt, which ends March 31, 2010.
