Lions Gate, MGM still in merger talks

June 25, 2010 at 2:58AM

Lions Gate Entertainment and Metro-Goldwyn-Mayer have been holding merger talks, but it is not clear that a deal will emerge, people briefed on the matter said on Thursday.

The two studios have been under pressure for much of the last year on different fronts.

Lions Gate is fending off a $7-a-share tender offer from the billionaire investor Carl C. Icahn. MGM is seeking to reorganize its $4 billion debt load as its creditors work on their own proposals for the company.

No specific merger proposal has surfaced yet, according to one of these people, who was granted anonymity because this person was not authorized to speak on the deal.

Earlier this year, Lions Gate bid for MGM, which has a large film library and owns the rights to the lucrative James Bond franchise. That offer earned the ire of Icahn.

The idea behind the talks would be a merger that could alleviate the problems of both companies. Should a formal proposal emerge, it would still need the acceptance of a wide range of other parties, including MGM's creditors and Icahn, who owns 31.8 percent of Lions Gate.

NEW YORK TIMES

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