Weinsteins' deal to reclaim Miramax falls apart [updated]
Bob and Harvey Weinstein's long-in-the-works deal to reclaim independent movie label Miramax Films from the Walt Disney Co. has fallen apart after several weeks of intense negotiations, according to three people familiar with the matter.
Talks between the Weinsteins, whose primary financial backer was supermarket mogul Ron Burkle, and Disney broke down even as lawyers were working out final deal points, the people confirmed.
Earlier this week, Disney had hoped to get the agreement finalized by Friday.
According to one person close to the negotiations, the deal fell apart due to complications over how Miramax would be integrated into the Weinsteins' existing company, The Weinstein Co., and other final points that couldn't be resolved.
The Weinsteins, whose money was to come from Burkle's Yucaipa Cos. and other investors including Fortress Investment Group, had most recently bid $625 million. However, another person briefed on the matter said that Burkle, who had planned to put in $300 million of his own money and was expecting to raise the balance, was unable to come up with enough money to satisfy Disney.
[Update, 3:30 p.m.: Burkle told The Times that he has the full ability to finance the acquisition.]
Disney had originally hoped to get as much as $700 million for Miramax, but appeared willing to accept $625 million.
Harvey Weinstein on Friday was still at the Cannes Film Festival in France, where he was expected to announce the deal's conclusion. He could not be reached for comment. A Burkle representative could not be reached for comment.
[Update, 5:18 p.m.: Harvey Weinstein and Ron Burkle released the following joint statement: "The Weinstein Brothers, The Weinstein Company and Ron Burkle are all working towards a deal to purchase and operate Miramax. The parties continue to work diligently towards an agreement."]
The Weinsteins and Burkle had been in exclusive negotiations with Disney after beating out two other bidders in April: investor brothers Alec and Tom Gores and an offshore entity organized by troubled financier David Bergstein and his partner, construction magnate Ron Tutor.
It's believed that Disney plans to approach the Gores about restarting talks.Disney shuttered Miramax, laid off 80 employees, and put it up for sale in January after concluding the low-budget film division no longer fit in its branded entertainment strategy.
The Weinsteins have been ardent pursuers of the film studio named for their parents, Miriam and Max, which they sold to Disney in 1993 for $80 million. They were forced out of the company in 2005 and founded their own film studio, The Weinstein Co., which has had a rocky track record and has never achieved the success of Miramax’s halcyon days. Other than last summer's hit "Inglourious Basterds," the New York-based company has released a number of box-office disappointments, including "Nine" and "Youth in Revolt," and consequently struggled financially.
-- Claudia Eller and Ben Fritz
Photo: Harvey Weinstein at the Broadway opening of "The Addams Family" in New York City. Credit: Jemal Countess / Getty Images