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MGM / UA Confirms Talks on Possible Sale of Firm

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Times Staff Writer

MGM/UA Entertainment Co. confirmed Monday that it is discussing the possible sale of the company, or one of its two movie subsidiaries, with three Egyptian brothers who recently bought London’s famed Harrods department store.

“As I have (previously) reported,” said MGM/UA Chairman Frank Rothman, “we have received many inquiries about the potential sale of MGM/UA or MGM or UA. Among those inquiries has been one from the Fayed family, with whom we are having discussions.”

He declined to give any further description of the talks. MGM/UA first mentioned a possible sale of the company or certain major assets May 28. Then, last Tuesday, it disclosed that it has had many recent inquiries from “substantial” outsiders expressing strong interest in obtaining the company or part of its assets.

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Rothman indicated Monday that he had not seen an article in the London Sunday Telegraph disclosing the Fayed discussions. The newspaper’s account, attributed to a Hollywood correspondent, said financier Kirk Kerkorian, who owns 50% of MGM/UA’s stock, apparently has been telling close friends that he invited the Fayeds “to look at the business and make an offer.” Rothman said it was “absolutely untrue” that Kerkorian made any approach to the Fayeds.

The newspaper also said it had been told that the Fayeds--Mohammed, Ali and Saleh--had asked their London merchant bank and a New York investment banker to investigate the possibility of a deal with Kerkorian.

Mohammed, the eldest brother, was quoted earlier this year in the international press as denying rumors that his Swiss-based group was acting as a front for the oil-rich Sultan of Brunei in buying the House of Fraser, owner of Harrods, for a reported $670 million. He said the family was acting on its own.

According to press reports, the Fayeds’ holdings include the Ritz Hotel in Paris, a bank in Texas, various properties in New York and interests in oil and construction.

Times staff writer Tyler Marshall, in London, contributed to this article.

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