Sony and itsequity partners issued a joint statement with MGM yesterday (23) that they haveentered into a definitive agreement under which the investor group will acquireMGM for $12 in cash per MGM share, plus the assumption of MGM's approximately$2bn in debt.
The investorgroup, which comprises Sony Corporation, Providence Equity Partners, TexasPacific Group, Comcast Corporation and DLJ Merchant Banking Partners, hascommitted a total of $1.6bn in equity financing to acquire MGM.
According to thestatement, Providence Equity Partners has committed $525m, Texas Pacific Group$350m, Sony $300m, Comcast $300m, and DLJ Merchant Banking Partners $125m.
JP Morgan Chasehas committed to lead a bank syndicate to provide up to $4.25bn in senior debtfinancing together with Credit Suisse First Boston.
Until the dealcloses MGM will continue as an active producer of film and television projects,and will continue to greenlight projects under the MGM and United Artistsbanners in the ordinary course of business consistent with its current businessplan.
Following theclose of the transaction, MGM will continue to operate under theMetro-Goldwyn-Mayer name as a private company headquartered in Los Angeles,while Sony Pictures Entertainment will co-finance and produce new pictures withMGM and distribute MGM's existing film and television content through SonyPictures' global distribution channels.
As previouslyannounced, Comcast, Sony Pictures Entertainment and the equity partners in theMGM transaction have agreed to a broad programming and distribution arrangementthat will allow for the distribution of Sony Pictures' and MGM content onComcast's video on demand platform, and for the creation of a joint venture, tobe managed by Comcast, establishing new cable channels featuring Sony Picturesand MGM content.
'We aredelighted to be able to make this announcement today together with ourpartners,' Sir Howard Stringer, chairman and chief executive officer ofSony Corporation of America, said in a statement.
'We alllook forward to preserving and enhancing the legendary franchise that is MGM,and to ensuring that its extraordinary content continues to be enjoyed bypeople around the world.'
'This is acompelling strategic transaction that will give MGM the ideal partners to buildon its unique legacy,' MGM chairman and chief executive officer AlexYemenidjian added.
'Thistransaction will deliver the full value of MGM to our shareholders, whilecreating significant value-creation opportunities for the new owners andexpanded options for consumers to enjoy MGM's content.'
The transactionhas been approved by MGM's board of directors and is now subject to theapproval of MGM shareholders, various regulatory approvals and customaryclosing conditions.