Icahn A Lion Tamer?
Activist investor Carl Icahn may be turning out to be a more influential figure in the resurrection of MGM than earlier reports had indicated. According to today's (Thursday) New York Post , besides securing for himself a seat on the MGM board (which had been widely reported), Icahn succeeded in obtaining an agreement from MGM's debtholders to open merger negotiations with Lions Gate Entertainment once MGM emerges from bankruptcy (which had not been reported). Icahn also objected to the original Spyglass deal under which Spyglass would kick in its own small film library in return for about 5 percent of the merged company. MGM lenders told Spyglass heads Gary Barber and Roger Birnbaum in effect to keep their films and gave them less than 1 percent of the legendary studio, according to the newspaper. Icahn said in a statement on Wednesday, "I am pleased that we were able to obtain an agreement to make changes to the MGM prepackaged plan that allows me to support it and enables the company to avoid a potentially costly and disruptive bankruptcy process." MGM said in its filing that, after emerging from bankruptcy, it plans to raise about $500 million to finance future movies and TV shows. Half of that amount is expected to be earmarked for MGM's agreed-upon contribution to the $500-million budget of the forthcoming Hobbit films.