Four months after the disappointing performance of its Blair Witch Project sequel, once high-flying US independent Artisan Entertainment has withdrawn plans for its initial public offering (IPO) and brought in investment bankers to explore merger and sale options.
In a statement, Artisan CEO Amir Malin said the company has "received a number of indications of interest regarding various strategic alternatives with the company. Although we are very excited about continuing to build on Artisan's many strengths, we believe it is appropriate to consider each inquiry from acquisition or merger partners."
Artisan is already believed to have had talks with suitors including Lions Gate Entertainment, Barry Diller's USA Networks and the World Wrestling Federation (which has recently been expanding into the film and TV arenas). But at least one of the potential buyers is thought to have balked at Artisan's $200m-$250m asking price.
Merrill Lynch and Allen & Co have now been hired to review proposals, which, besides the existing suitors, could come from foreign players who have already done business with Artisan. MGM is also thought to be a possible bidder. Holding a 5% stake in Summit Entertainment and working through output deals with overseas distributors including Alliance Atlantis/Kinowelt, Germany's Highlight Communications and Spain's Lauren Film, Artisan is well known in the international marketplace. A deal with Lions Gate could align Artisan with Mandalay Pictures (in which Lions Gate holds a 46% stake) and Germany's Cineartists Entertainment (though Mandalay and Cineartists' own proposed IPO, on the German Neuer Markt, was itself called off this week).
Artisan's IPO, designed to raise $140m for debt repayment and general working capital purposes, was first announced in February 2000, when the company was riding high on the success of the original Blair Witch Project. The performance of the sequel and poor conditions on Wall Street delayed the offering and the company this week blamed "unfavourable market conditions" in the hard-hit financial markets for the withdrawal of the offer.
Artisan has recently been buoyed somewhat by the performance of Requiem For A Dream and has been pinning future hopes on Dirty Dancing 2, which it is producing with Miramax. The biggest lure for a buyer, however, would probably be the company's 6,700-title library (much of it inherited from Live Entertainment). The library includes such titles as Dirty Dancing, The Terminator and The Piano, though in some cases the rights to the films are thought to be limited.
This week, Artisan extended its existing US pay TV deal with Showtime Networks to 2008. It is estimated that the deal could eventually produce revenues of as much as $500m-$900m for Artisan.