The United Artists movie studio, maker of Oscar-winning "Rain Man," will be sold to an Australian entertainment company for $1 billion under an agreement announced late Friday.
The deal would give Qintex Group, one of the makers of the recent CBS miniseries "Lonesome Dove," most of the assets of MGM-UA Communications Co., including rights to "Rain Man." Also included would be a library of 4,000 movies, among them the "James Bond" and "Pink Panther" series, the video library and movie and television production and distribution facilities.
MGM-UA's majority shareholder, Kirk Kerkorian, would retain control of the MGM name and TV and movie studios, as well as 34 MGM movies, including "Moonstruck" and "A Fish Called Wanda."
The agreement between Qintex and Kirk Kerkorian is subject to unspecified government, shareholder and "third-party" approvals, according to a joint announcement by the two companies.
MGM-UA officials refused to elaborate on a news release, which said the deal was expected to be complete in late summer.
How Deal Would Work
It is the second time this year Kerkorian has agreed to sell part of the company he assembled out of the former United Artists and Metro-Goldwyn-Mayer studios. In addition to a collapsed deal to sell an interest in the MGM name to fellow Hollywood investor Burt Sugarman in July, Kerkorian has been publicly shopping all or part of MGM-UA for months.
Kerkorian, who owns 82% of MGM-UA through his Tracinda Corp., pumped $180 million of his own funds into the money-losing company in January. MGM-UA lost $39.5 million in the first quarter of 1989 and $48.7 million in 1988.
Under the complicated agreement with Qintex, Kerkorian will hang onto rights to the MGM name and roaring lion logo as well as movie and TV production units. Also remaining with MGM are 34 movies made since June 1986, including "Moonstruck," "A Fish Called Wanda," and "Willow;" 1,750 hours of TV programming including the ongoing shows "thirtysomething" and "In the Heat of the Night;" and the MGM headquarters building here.
The deal is to work this way: Kerkorian sells 100% of MGM-UA to Qintex for $20 a share, or about $1 billion. Then the company is split, and Kerkorian buys back what will be the new MGM--the MGM movie and TV studios plus the 34 movies in the MGM film and video libraries--for $250 million.
Further intertwining the now independent MGM and UA, Kerkorian is to invest $75 million in Qintex, and the companies sign various distribution agreements.