MGM Joins In the Bidding for Orion Pictures

With an important bankruptcy court hearing looming, another possible purchaser of troubled Orion Pictures emerged Tuesday--MGM-Pathe Communications Co.

The entry of MGM, owned by the French bank Credit Lyonnais, raises to three the number of bidders seeking to acquire or merge with Orion, producer of “The Silence of the Lambs,” 1991’s Oscar juggernaut. Orion filed for Chapter 11 bankruptcy protection in December, despite a years-long string of Academy Awards.

On Tuesday, Orion announced that it will set a deadline of 2 p.m. Thursday for new proposals. Interim President Leonard White said the company and its creditors “must now proceed rapidly toward” comparing the three offers.

In announcing its interest in Orion, MGM said it is seeking to distribute Orion’s unreleased pictures and its library of older films.

It did not announce the terms it proposed. But a source familiar with the offer said it would include $50 million in cash and a credit line of up to $35 million. According to the source, MGM would impose a 20% distribution fee on Orion’s new films and a 15% distribution fee on the films from its library.

Craig A. Parsons, a spokesman for MGM, said the studio’s offer “would benefit both” MGM and Orion.

MGM, whose operations have been disrupted by its protracted legal battles with former owner Giancarlo Parretti, would be able to buy finished films to immediately fill out its lineup. Orion and its creditors would benefit from revenue generated through the help of MGM’s existing marketing and distribution structure.

The judge overseeing Orion’s bankruptcy petition urged the studio’s executives and creditors in March to agree upon a potential reorganization plan before the hearing scheduled for Tuesday in Manhattan.

Two other suitors have already submitted bids for Orion: Savoy Pictures Entertainment Inc., a film-distribution company formed in February with the backing of New York investment banker Herbert Allen Jr., and Los Angeles-based Republic Pictures Corp., which last week proposed a complex merger arrangement.

New Line Cinema Corp., the first firm to bid, sweetened its offer but then withdrew April 21.

The task of comparing the competing offers for Orion falls in part to Wilbur L. Ross Jr., a New York investment banker advising the studio’s unsecured creditors. Ross--whose clients in the matter include performers Jodie Foster and Kevin Costner and other actors, directors and bondholders--had predicted increased interest from prospective purchasers as the bankruptcy court hearing approached.

He said Tuesday that other prospective suitors who have informally expressed interest may emerge.

“I think it’s going to be fairly lively over the next seven days,” Ross said.