‘Twilight’ studio Summit sale on hold until 2012

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‘Twilight’ studio Summit Entertainment is still deep in negotiations with two potential buyers, but won’t reach an agreement with either before the end of 2011.

The Santa Monica firm remains in talks to sell itself to fellow studio Lions Gate Entertainment and private equity firm Colony Capital, a co-owner of Miramax, people familiar with the matter but not authorized to speak publicly said.

Executives at Summit had hoped to close a deal by the end of the year because of certain tax and financial advantages, two of the people said, but that has virtually no chance of happening by Saturday.

Instead, talks with both parties have slowed down during the holiday season and are expected to pick back up next week. Summit is likely still looking to close a deal as soon as possible, as it is currently in a good position with one more ‘Twilight’ sequel yet to be released and a significant pile of cash that, one knowledgeable person said, will be distributed to investors in the event of a sale.

Both Lions Gate and Colony are said to be offering about $350 million to $400 million to acquire Summit, along with the assumption of roughly $200 million in debt.

If Lions Gate were to take control, Summit chiefs Rob Friedman and Patrick Wachsberger are expected to run the merged studio’s motion picture group, sources close to the negotiations said. If Colony, which is led by billionaire investor Tom Barrack, were to be the winning bidder, Summit would likely be merged with Miramax. In that scenario, it’s likely that Friedman and Wachsberger would run the combined company, possibly alongside Miramax CEO Mike Lang.

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-- Ben Fritz