LOS ANGELES, Sept 25: A consortium led by Sony Corp. that includes US cable television operator Comcast has finalized a deal to acquire MGM studios for around $4.9 billion, official said on Friday.
The MGM board on Thursday approved the deal, which was tentatively sealed on September 13, closing an era in Hollywood history with the corporate acquisition of the 80-year-old independent studio.
"The board accepted the deal but we still need to seek shareholder approval and regulator approval," studio spokesman David Bloom told AFP.
The final terms of the deal mostly confirmed the terms of the agreement in principle, but added a new twist: the inclusion of the largest US cable TV provider firm Comcast in the consortium.
The acquiring group now includes Sony Corp. of America, Providence Equity Partners, Texas Pacific Group, Comcast Corp. and DLJ Merchant Banking Partners.
Under the deal, the group agreed to pay $12 per share in cash to MGM shareholders including casino mogul Kirk Kerkorian, who holds 74pc of MGM stock, and to assume around $2 billion in debt.
The transaction is expected to close in mid-2005 and until it is concluded, MGM will continue to push ahead with its own movie projects, studio officials said.
The consortium and MGM said the Sony group had committed 1.6 billion dollars in cash to buy the studio, with the lion's share - 525 million dollars - being provided by investment firm Providence Equity Partners.
Texas Pacific Group will contribute 350 million dollars, while Sony and Comcast will put in 300 million dollars each and DLJ Merchant Banking Partners will commit 125 million.
JP Morgan Chase will lead a banking syndicate to provide up to 4.25 billion dollars in senior debt financing together with Credit Suisse First Boston, the partner announced.
Comcast, which earlier this year failed in its bid to acquire the Walt Disney Co., last week reached a separate agreement with Sony to create cable channels featuring content from Sony and MGM, which boasts a library of 4,100 films including the "James Bond" and "Pink Panther" series.
Comcast, Sony and other equity partners also agreed last week to produce programming and distribute movies through Comcast's video-on-demand systems, a lucrative revenue area for media groups.
"We all look forward to preserving and enhancing the legendary franchise that is MGM, and to ensuring that its extraordinary content continues to be enjoyed by people around the world," said Sony Corp. of America chief executive, Howard Stringer.
MGM chairman and chief executive Alex Yemenidjian said the deal would give MGM the ideal partners to build on its unique legacy.-AFP