Disney receives three bids for Miramax
Walt Disney Co. has received three bids for the specialty label Miramax Films, people close to the situation said, and now has to decide whether to sell the asset or hold on to it.
Supermarket magnate Ron Burkle and his Yucaipa Cos. made a bid in association with Bob and Harvey Weinstein, the founders of Miramax who sold the company to Disney in 1993 but were forced out five years later after falling out with their Burbank-based corporate parent.
Also bidding was another set of brothers -- Alec and Tom Gores, who run separate investment firms, the Gores Group and Platinum Equity. Their sibling Sam Gores, founder of Paradigm talent agency, has been advising his brothers in the negotiations.
And coming in at the last minute was financier David Bergstein, who, through his firm Pangea Media Group, had been kicking the tires on Miramax for weeks, said a person familiar with the matter. Pangea's bid was the highest of the bidders, the person said.
Disney was initially seeking an all-cash deal of $650 million to $700 million, people close to the matter said. Summit Entertainment and Amir Malin's investment firm Qualia Capital early on weighed making bids, but balked at the asking price.
A spokesperson for Disney did not respond to requests for comment.If the Burkle-Weinstein bid is successful, the Weinsteins would be primarily managers for hire to exploit the 600-title library they helped build and to produce and distribute new films under the Miramax label. Under the Weinsteins, Miramax was responsible for such Oscar winning movies as "Shakespeare in Love," "The English Patient" and "Chicago" and earlier offbeat hits like "Pulp Fiction" and "The Crying Game."
For the Weinsteins, just being able to say they are back in the saddle at Miramax would be, if nothing else, a psychological victory. But whether they would also bring back their former Midas touch remains to be seen. Other than "Inglourious Basterds," the Weinstein Co. has had few successes to boast about in recent years. The company has gone through a major financial restructuring and drastically cut back both its staff and movie slate. Several of its movies have either gone straight to DVD or are sitting in limbo awaiting release.Over the last week, the Gores and Weinsteins had discussed the possibility of joining up in a bid, but ultimately the parties decided to make independent offers.
Both the Gores and Weinsteins are interested in keeping Miramax alive as a going concern, according to knowledgeable people.
Early this year, in a cost-saving move, Disney shut down the independent film unit's New York and Los Angeles offices and pink-slipped dozens of people. Disney Chief Executive Bob Iger made it clear in an earnings call in February that "continuing to invest in Miramax movies wasn't necessarily a core strategy of ours." Under Disney's recently installed movie chief Rich Ross, the studio is primarily focusing on making and releasing family branded films that can be exploited across all of its entertainment divisions, including consumer products and theme parks.
If the Gore brothers were to prevail in acquiring Miramax, they would need to find a strategic partner involved in movie distribution since the investors have no such infrastructure in place.Bergstein's emergence adds even more intrigue to the Miramax sale. He and his business partner Ron Tutor are embroiled in a nasty legal dispute with a number of creditors who are attempting to force five of their companies into Chapter 11 bankruptcy proceedings. The creditors' filings made in U.S Bankruptcy Court in Los Angeles last month accuses Bergstein of financial mismanagement and alleges that he has "demonstrated repeatedly that he is unfit and incompetent."
Last week, a federal bankruptcy judge appointed an interim trustee to oversee Bergstein as he continues to run the five companies.-- Claudia Eller, Dawn C. Chmielewski and Joe Flint