Time Warner may bid for MGM

Time Warner Inc. is considering making a second-round bid of up to $1.5 billion for Hollywood studio Metro-Goldwyn-Mayer (MGM).  Others expected to participate in the bidding process, which ends today, include Access Industries and the independent studio Lions Gate, which is said to have made a bid of between $1.4 billion to $1.8 billion. Reports suggest that Access has indicated it could make an offer of as much as $2 billion. New York-based Time Warner is the parent company of Warner Bros and owns cable networks such as CNN and TNT. It is said to be considering making a bid of between $1.2 billion to $1.5 billion. MGM, which put itself up for sale four months ago, invited six companies to make non-binding bids in January. The current round of bids is asking for binding acquisition offers only. It is believed that todayÔÇÖs deadline could be extended, however, to allow any other serious parties to get involved. If successful, Access is said to be likely to sell off MGM's rights to the James Bond and Hobbit franchises. Time Warner, however, would probably fully exploit both but may have little use for the movie library. Lionsgate would be more likely to seek a partner or sell off the franchises. MGMÔÇÖs creditors have allowed the studio to delay making payments on about $3.7 billion in debt until March 31. It is thought that they may not consider any offers coming in at under $2 billion. Previous bidders who have now pulled out of the process include Engelwood, Colorado-based Liberty Media Corp. and the hedge fund Elliott Management Corp., which was working with Relativity Media. MGM, the distributor of the James Bond movies, has been sold several times since its founding in 1924. It was taken private for $5 billion in 2005 by investors including Sony and Comcast. It owns a movie library with 4,100 titles and has a co-production deal with Warner Bros. on the planned film The Hobbit, which is based on the J.R.R. Tolkien novel. The studio is stressing the value of its film archive as a major asset, with other assets including MGM and United Artists names and logos, as well as MGM's TV operations. Possibilities for MGM now include picking one of the offers, starting a third round of bidding or opting for recapitalization. Time Warner is the worldÔÇÖs largest entertainment conglomerate by revenue, ahead of Disney and New Corporation.