Pathe Pays MGM/UA Another $50 Million

After a one-week delay, Pathe Communications Co. on Thursday paid its third $50-million deposit toward its planned purchase of MGM/UA Communications Corp. for $1.2 billion.

MGM/UA announced that it had received the non-refundable payment late Thursday afternoon. Pathe has now put $225 million down on the deal, including two previous $50-million deposits and a security interest of $75 million in three upcoming Pathe films.

Pathe’s payment came as the company prepared to host a lavish party at the Cannes Film Festival tonight. Company officials had planned to announce the completion of the MGM/UA deal at the party, but the acquisition reportedly has been delayed by financing difficulties.

Pathe Co-President Giancarlo Parretti has yet to announce where he is getting the $450 million still needed to complete the deal, which is scheduled to close by June 23. The one-week extension requested by Pathe to make its third of four down payments only fueled speculation that the deal might collapse. But company officials insist that the acquisition remains on track.

Pathe offered in March to acquire all of MGM/UA’s common and preferred stock outstanding for $20 per share. Time Warner Inc., the massive entertainment and publishing company, later agreed to foot half the bill in return for distribution rights to the valuable United Artists film library and future MGM/UA and Pathe releases.

In a separate transaction, Pathe announced Tuesday that it is selling its 60% share in Cannon Pictures to Trihoof Investments B.V., a Dutch firm that already owns 20% of the company, for $15 million. The deal also calls for Trihoof to assume $15 million in debt.

MGM/UA stock closed up 37.5 cents a share at $17.75 before confirmation that the third $50-million installment had been made. Pathe stock slipped 12.5 cents to close at $4.375. Time Warner was down $1.75 to $92.50.