Exclusive: Ousted MGM CEO explores bid for the U.S. movie studio – sources

(Reuters) – Previous MGM Holdings Inc Main Govt Officer Gary Barber, who was ousted previously this 12 months, is talking to financial commitment banking companies about financing an provide to acquire the privately held U.S. motion picture studio, 5 people familiar with the make any difference reported on Monday.

Gary Barber, co-CEO of MGM, accepts the award for Very best Motion Movie for “Skyfall” at the 2013 Critics’ Option Awards in Santa Monica, California, January 10, 2013. REUTERS/Mario Anzuoni

MGM could be worth much more than $5 billion which include credit card debt, and it is considerably from certain that Barber can raise the money for a bid, the sources reported. His opportunity bid, nevertheless, is aimed at convincing the hedge money that have and manage MGM to take a look at a sale, the sources additional.

Barber owns about 9 per cent of MGM by inventory selections right after serving as its CEO between 2010 and 2018, according to the sources. He was permit go abruptly in March from MGM right after signing a 5-12 months extension to his agreement, according to the sources. MGM at the time did not give a explanation for his departure.

The sources requested not to be recognized for the reason that the make any difference is confidential.

Anchorage Money Group LLC, the biggest shareholder, along with the other entrepreneurs, have substantial valuation expectations for the company and believe that the company can nonetheless improve in benefit, the sources reported.

A agent for Anchorage and an additional MGM proprietor, Highland Money Management, declined to remark. Barber and MGM could not be attained for remark. Solus Different Asset Management, an additional investor in MGM, did not promptly react to a ask for for remark.

Renowned for its library that includes the James Bond franchise, “Rocky” and other basic videos, MGM co-makes and distributes tv demonstrates these kinds of as “The Handmaid’s Tale” on Hulu, “Vikings” on A&E and “Fargo” on Forex. It also owns MGM-branded U.S. channels that participate in its films and intercontinental networks.

Barber led the company’s turnaround pursuing its emergence from individual bankruptcy in 2010. Considering the fact that Barber’s departure, MGM’s board designed an “office of the CEO” comprised of a group of senior leaders to run the company.

Anchorage has a around 35 per cent stake, according to sources, while a submitting confirmed that Highland and Solus just about every have much more than 10 per cent of the company.

The hedge money were being collectors for MGM before it submitted for individual bankruptcy, and it is unusual for them to keep their possession stakes for just about a decade.

MGM has so considerably been in an acquisitive manner, alternatively than demonstrating any willingness to provide. It bought the 81 per cent stake in U.S. channel Epix it did not previously have from Viacom Inc and Lions Gate Amusement Corp for about $1 billion last 12 months.

MGM has about $1.9 billion in credit card debt, which include a revolving credit line, according to Thomson Reuters Financial loan Pricing Corp. It produced annual income of $1.3 billion last 12 months, up from $1.18 billion a 12 months previously. It documented internet earnings of $548 million last 12 months, up from $155 million in 2016.

Reporting by Liana B. Baker and Jessica Toonkel in New York added reporting by Jessica DiNapoli Editing by Cynthia Osterman and Lisa Shumaker

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