Pathe Stock Up on Rumor About Early MGM Merger

Pathe Communications Co. stock rose 50 cents a share Wednesday to close at $3.75 as word spread among Wall Street analysts and traders that the company’s planned merger with MGM/UA Communications Co. could occur as early as Friday.

MGM/UA stock was up 25 cents a share to $14.25.

The $1.3-billion deal is not scheduled to close until Tuesday, but sources close to the discussions said Pathe already may have lined up the financing needed to complete the deal.

Spokesman Craig Parsons confirmed that Pathe Co-President Giancarlo Parretti, who was said to have been out of the country for the past several weeks, has returned to Los Angeles. Parsons declined to say how soon the merger might be completed, however.

The Pathe-MGM/UA deal has already been delayed once because of financing problems. Several published accounts have had Parretti recently scouring the globe in search of nearly $1 billion. Media mogul Ted Turner, mentioned as one possible financial backer, has declined comment. An unnamed Japanese firm is also said to have committed funds toward the deal.

Pathe has already made non-refundable payments totaling $353 million to MGM/UA. The Beverly Hills-based company has also pledged $75 million in securities to the $21.50-a-share purchase.