MGM Holdings Inc., the movie studio home of the James Bond franchise, is exploring a sale, the Wall Street Journal reported Monday.
The company, which has a market value of roughly $5.5 billion based on privately traded shares and debt, has hired Morgan Stanley and LionTree LLC to launch a formal sale process, unnamed individuals with knowledge of the plan told the Journal.
The storied studio has a rich library of movies and TV shows that could be attractive to both other studios and streaming services. In addition to the James Bond and “Rocky” franchises,” MGM produces TV hits such as “The Handmaid’s Tale” and “Vikings.” The studio’s library includes a 4,000 film titles and 17,000 hours of TV programming.
A rep for MGM declined to comment on the report.
According to the Journal, the company’s biggest shareholder, Anchorage Capital Group, has been an increasingly tight financial bind because of its large stake in the studio, which also owns the owns Epix premium TV channel and video-streaming service as well as a controlling stake in “Survivor” producer Mark Burnett’s production company.
Two years ago, MGM fired its then-CEO Gary Barber for having early, unsanctioned talks with Apple Inc. to sell the studio for more than $6 billion. The preliminary discussions fell apart when he was ousted. According to the Journal, Anchorage co-founder and MGM board chairman Kevin Ulrich told investors at the time he could snag an $8 billion-plus sales price in two to three years.
Anchorage and several other hedge funds assumed control of the studio when it filed for bankruptcy in 2010. They planned to license the studio’s library content and boost its value with a series of new hits, often based on existing properties — like two successful “Rocky” spinoffs starring Michael B. Jordan as the son of Rocky Balboa’s boxing rival Apollo Creed.
But last year, the studio grossed just over $23 million at the domestic box office — and this year’s releases have been delayed by the pandemic, including the expected blockbuster 25th Bond film, “No Time to Die,” which is currently aiming for an April 2021 release in theaters.
Still, MGM reported $181 million in adjusted Ebitda for the first three quarters of 2020, up from $123 million in 2019, thanks mostly to revenues from TV licensing and lower marketing expenses.