Lions Gate Entertainment (LGF) has met with Metro-Goldwyn-Mayer (MGM) to present a proposal to combine the two studios once MGM emerges from bankruptcy. Lions Gate vice chairman Michael Burns confirmed on CNBC the studio has been holding talks with Investor Carol Icahn, who owns 33.5 percent stake of Lions Gate.
Icahn had threatened a proxy battle in the past, but has recently advocated a merger between Metro-Goldwyn-Mayer and Lions Gate Entertainment. Lions Gate Vice Chairman Michael Burns said executives are in New York City to meet with MGM.
Icahn holds more than $600 million in MGM debt, making him one of the company’s largest debt holders. He agreed to support MGM’s prepackaged Chapter 11 bankruptcy last week after the studio made several changes to its reorganization plan.
“If we can make the right transaction, make an accretive transaction for our shareholders, that we would absolutely embrace that idea,” Burns said. “We’re very interested in the MGM transaction.”
Lions Gate Entertainment (LGF) posted s loss for its fiscal second quarter late yesterday, of $29.7 million, or $0.22 per share, compared to a profit of $31.7 million, or $0.26 per share, in the same quarter last year.
Earnings per share were below Wall Street Forecasts, but revenue increased 25%, to $456.3 million, well ahead of analyst expectations.