News Corp. Talks to Buy MGM Hit Impasse

MGM’s restrictive nondisclosure clause cited as cause for breakdown of negotiations

Last Updated: December 21, 2009 @ 12:03 PM

MGM’s nondisclosure agreement appears to be derailing News Corp.’s negotiations to acquire the troubled studio, according to published reports citing anonymous insiders.

The unusually restrictive clause has executives at News Corp.-owned Fox worried that it would place the company at risk if they sign it.

MGM reached an agreement with its lenders in November that forestalls interest payments due on its $3.7 billion debt until Jan. 31. MGM is trying to further restructure its debt to avoid bankruptcy.