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Indian conglomerate says it offered $2-billion-plus for MGM; questions abound

September 20, 2010 |  1:50 pm

Indian conglomerate Sahara India Pariwar has announced that it is bidding more than $2 billion to acquire Metro-Goldwyn-Mayer, but a person close to the senior debt holders of the beleaguered studio said that they have only received an inquiry and that he is not aware of any negotiations underway.

MGM's creditors are finalizing a deal with Spyglass Entertainment to take over management of the studio as part of a prepackaged bankruptcy that is expected to be filed in October. The parties signed a non-binding letter of intent this month.

Late last week, a Sahara representative sent an e-mail to press announcing that the conglomerate had made a $2-billion-plus offer to acquire MGM's debt. "The powerhouse, Sahara India Pariwar, has made a formal offer to buy out MGM’s debt," the e-mail said. "The substantial offer is currently in negotiations to purchase and assume Metro-Goldwyn-Mayer's debt for over two billion."

The person close to the senior debt holders said Sahara's "offer" is being evaluated. Several other people close to the company said they don't expect the new bid to slow down plans for the deal with Spyglass.

Sahara described itself in the e-mail as a "multi-faceted conglomerate" that has interests in "finance, housing and urban development, consumer products, manufacturing, travel and tourism, entertainment and media." E-mails to a Sahara spokesman in India for further comment were not returned.

In order for the bid to advance, Sahara would have to gain the support of many of MGM's more than 100 creditors that own its nearly $4 billion worth of debt. A committee of senior creditors, including Anchorage Advisors and Highland Capital Partners, is determining what will become of MGM as the studio is no longer able to afford debt interest payments.

Also key to the fate of the studio are producers Barbara Broccoli and Michael Wilson, who have significant sway over the James Bond movie franchise long associated with MGM. David Pope, chief executive of Broccoli and Wilson's company Danjaq Productions, said neither he nor the producers have had any contact with Sahara. "We have no involvement with them whatsoever," he said.

-- Ben Fritz and Claudia Eller

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