The juicy details: Ron Burkle will have ownership after putting up $325 million cash
The Weinstein brothers’ five-day negotiating window to try to seal the deal to buy the Miramax library from Disney expires on Wednesday, and it’s not done yet.
That said, the architecture of a final agreement has come into place, as dozens of lawyers crawl over every financial statement and document before anything is signed.
The broad outlines include:
– A $625 million purchase price in exchange for …
– Miramax’s 611 films, including five unreleased movies (Disney will keep ‘Gnomeo and Juliet’)
– Ron Burkle will put in $325 million in equity, Fortress and Colbeck Capital will provide $300 million in debt; Burkle will own most of the company.
– The Weinstein Company will be paid a fee to distribute and manage the library, somewhere over 10 percent of the annual revenue it produces.
If and when the deal is sealed, it will make Burkle, a billionaire who made his fortune in supermarkets, a new player on the Hollywood landscape.
As the owner of the lion’s share of Miramax, he will have played the role of avenging angel for Harvey and Bob Weinstein, who lost ownership of the company they founded when they sold it to Disney in the 1993, and suffered the indignity of not being permitted to take the name when they left Disney in 2005.
Despite the big number that Disney achieved, the reality of what Burkle et al will pay is substantially less than that. As WaxWord has previously reported, there is about $200 million in contract receivables, cash that will flow into the company over the next three years. Analysts discount that number because of the time value of money.
What that means is, Burkle and Fortress will actually have paid about $475 million to acquire the Miramax library.
The purchase price came about after the Gores brothers upped their bid from $550 million, and David Bergstein and his backers said they were prepared to raise their bid from $650 million. (Disney has privately said that Bergstein was prepared to go to $700 million.)
With a deal substantially under way, Disney is likely to extend the negotiating window that WaxWord first reported last Thursday, in order to get it done.
Individuals close to the negotiations said a deal is not imminent, but could possibly get done by Friday.
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