News Corp. expected to sign nondisclosure agreement to look at MGM's books (Updated)
News Corp., parent of the Fox movie and television studio, is expected to sign a nondisclosure agreement today to look at MGM's books after the debt-ridden company tweaked the terms to be less restrictive, according to company insiders. The Rupert Murdoch-controlled media giant had initially rejected the original language in the agreement, which must be signed by suitors to review MGM's financials.
But News Corp./Fox executives and MGM reps resolved the issues in a meeting yesterday.
Once signed, News Corp./Fox will begin its due diligence and weigh a bid. So far, about 14 companies have signed nondisclosure pacts.
While MGM told potential bidders that they must formally register their interest or non-binding offers, or both, today (Jan. 15), that deadline appears to be soft. One suitor, for example, has requested more financial information about MGM before it makes a bid.
By the end of today, Time Warner and Lions Gate are among those expected to put in bids, according to people close to the situation.
MGM, which is struggling under nearly $4 billion in debt, is hoping to fetch bids of $2 billion to $2.5 billion. But offers are expected to come in under the lower end of that figure, said people involved in the process.
An MGM spokesperson could not immediately be reached for comment.
Update (4:06 p.m.): MGM just issued a statement saying it was in the process of receiving "indications of interest" in the studio from potential bidders" and once it completed reviewing the inital bids would "begin the second phase of its strategic review process." MGM had set a today deadline for potential bidders to register their interest or put initial offers on the table. More than 14 companies have signed non-disclosure agreements, including News Corp., Time Warner, Lions Gate and Summit Entertainment, to review MGM's books. The "second phase" of the review process is expected to get underway next week, according to a person close to the matter.
-- Claudia Eller