17 January,2010 10:22 AM IST | | Agencies
Reliance Entertainment of the Anil Dhirubhai Ambani Group, plans to take over the once-successful Hollywood studio Metro-Goldwyn-Meyer better known as MGM.
Reliance is one of the seven contenders vying for the takeover. Others include a telecom company and many private equity entities who have joined in on the second round of bidding scheduled for next week.
Sources claim that MGM owes $450 million to JP Morgan Chase and $500 million to Merrill Lynch which is one of the reasons why the bidding for the debt ridden studio was way below the $2-billion mark.
Reliance, which has already entered into a $1.2 billion deal with Steven Spielberg's DreamWorks, hope to have a stronger presence in Hollywood with this deal. However, there has been no response from the company in question. When contacted, a spokesperson for Anil Dhirubhai Ambani Group said, "As a policy, we do not comment on speculations."
Speculations were rife that MGM had been taken over in 2008 but executives at the studio denied the claims till the latter half of the year. Reports suggested that a group of private equity companies who owned MGM would settle for nothing below $5 billion which was the amount they bought it for in 2004.
MGM has released one film last year -- a remake of 1980s musical 'Fame'. The attraction for bidders is the 40-year-old archive of movies and and TV shows that MGM owns.
