Icahn Had Obtained $500 Million In Debt At Cut-Rate Prices
LOS ANGELES – MGM said on Friday, creditors of struggling Hollywood studio Metro-Goldwyn Inc. have voted to approve a merger with Spyglass Entertainment. A person familiar with the matter told The Associated Press, the approval came with the backing of billionaire investor Carl Icahn.
The person spoke on condition of anonymity and he was not authorized to discuss the issue publicly. The person said, a significant holder of MGM’s dept, Icahn, in exchange for representation on MGM’s board, voted for the Spyglass plan even though he had publicly supported a rival bid from Lions Gate Entertainment Corp. More than half of the creditors, needed to support the plan, while holding more than-two-thirds of the $4 billion in debt outstanding.
It was by the Los Angeles Times, that the news of Ichan’s support for the plan was earlier reported. On late Friday in a statement, MGM asserted the secured lenders voting in the process had “overwhelmingly approved its proposed plan of reorganization”. A prepackaged Chapter 11 bankruptcy has been included in the plan. To implement the plan MGM asserted it would move “expeditiously”.
Gary Barber and Roger Birnbaum, Spyglass co-CEOs, are now set to head the storied studio which is situated behind the franchise of the James Bond. They also own half the rights of the upcoming movies based on “The Hobbit”. Ichan, had been buying up MGM debt in order to better control the outcomes of the vote, who also holds more than a third of Lion Gate’s shares. The backing of it, after he had bought up stakes in both sides of the deal in order to maximize his profits, Lion Gates upset at Icahn’s strategizing, sued him on Thursday for first opposing the deal.
Lions Gate asserted that without notifying other shareholders of his intentions, Icahn had obtained $500 million in debt at cut-rate prices. To a request for comment, Icahn did not respond. While detailing its proposal in a securities filing and touting its management’s expertise even in its suit against Icahn, Lion Gate had pressed its case strongly in the past week.
