Film studios discuss possible merger
MGM and Lions Gate consider deal
Film studios Lions Gate Entertainment and Metro-Goldwyn-Mayer
(MGM) are in discussions over a possible merger.
The two firms have been looking to tie up a deal in recent years
as they are both of similar size.
However, while Lions Gate had success with TV shows such as
Weeds and the hit horror film franchise Saw, MGM has struggled to
deal with its $3.7 billion (£2.48 billion) debt.
The firm was acquired by a Sony-led consortium in 2005, but
lenders have recently taken control to try and turn around the
A possible takeover bid has been mooted but only Time Warner
remain in contention as MGM rejected offers below $1.5 billion (£1
One possible obstacle to a merger is opposition from one of
Lions Gate's chief shareholders, Carl Icahn, who recently raised
his stake in the firm to 31.8 per cent.
A source told the Financial Times that any deal with MGM would
need to be approved by Mr Icahn, who has expressed his criticism of
a bid in the past.