New Line Says It Is Dropping Bid for Orion

New Line Cinema Corp. has dropped out of the bidding for Orion Pictures, the studio in Chapter 11 bankruptcy proceedings.

New York-based New Line, which in January made the first formal bid for Orion, withdrew its offer Tuesday, citing an inability to win support from Orion’s creditors.

“Our perception of value is somewhat higher than theirs, apparently,” said Wilbur R. Ross Jr., a Manhattan investment banker who is advising the creditors. “For the moment, at least, the talks have been suspended.”

Ross said New Line’s withdrawal may prompt other potential buyers to come forward. The other formal pending offer for New York-based Orion is from Savoy Pictures Entertainment Inc., backed by New York investment banker Herbert Allen Jr.

A source said one of the companies seriously considering an offer is Los Angeles-based Republic Pictures Corp. Orion filed for bankruptcy protection in December.

For his part, Ross said he expected Orion’s ownership status to be largely resolved by May 22, when management would otherwise need a new authorization for operating funds from U.S. Bankruptcy Judge Burton R. Lifland.

New Line President and Chief Operating Officer Michael L. Lynne said the firm’s “substantially different” revised offer April 16 was worth more than the first, proffered in January.

Times staff writer Alan Citron contributed to this story.