Billionaire John Kluge threw a wrench into PolyGram Filmed Entertainment's plans to buy the film and television library of ailing Samuel Goldwyn Co. with an 11th-hour, $115-million bid for the whole company.
Goldwyn on Thursday confirmed its executives received a $5-a-share bid of cash or shares from Kluge's Metromedia International shortly after the company announced its PolyGram deal. The bid includes paying $42.45 million for Goldwyn stock, paid in cash or shares at Metromedia's option, and assuming $72.9 million in debt.
Goldwyn, in a statement read by Chief Financial Officer Hans Turner, said it will consider the bid as soon as practicable, but the company had little else to say.
Sources said the bid will not be considered until after the first of the year because many of Goldwyn's directors and executives are away for the holidays.
"I'm not sure this is the last bid you will see," said Jeffrey Logsdon, analyst with Seidler Cos.
The bid came hours after PolyGram said it agreed to pay $62 million for the Goldwyn libraries. It hinges on a number of routine closing conditions, but also includes a condition that Metromedia reaches a satisfactory agreement with Chairman Samuel Goldwyn Jr., son of the legendary Hollywood mogul, regarding rights held by a family trust that are licensed to the company.
The offer took those involved in the PolyGram/Goldwyn deal by surprise.
"Search me," said Michael Kuhn, president of PolyGram Filmed Entertainment, when asked what Metromedia plans.
"There's not much to be said on our part," he said. "We put in a price that is fair for us and fair for Goldwyn. I'm confident [PolyGram's bid will succeed] if normal valuations apply. There's always a chance someone will come in and overpay. In that case, it's good luck and goodbye."
Goldwyn, known for such upscale films as "The Madness of King George" and "Much Ado About Nothing" has been struggling financially.
A deal with Metromedia would combine it with Kluge's Orion Pictures, which hasn't been a major force in the industry since it released such hit films as "Dances With Wolves" and "Silence of the Lambs." Combined, the two companies would have a library of more than 2,000 films.
"What was particularly attractive was the combination of the libraries of Goldwyn and Orion," said Metromedia spokeswoman Jennefer Hirshberg.
There was no word on what Metromedia plans to do with Goldwyn's movie theaters, which are said to be worth about $50 million.
Goldwyn stock was at $3.75 on the American Stock Exchange when trading was halted after the Metromedia bid.
The bid is the latest indication that Kluge is serious about making a new push into entertainment despite being burned more than three years ago when Orion was forced to enter bankruptcy proceedings, from which it has since emerged.
Kluge has the kind of deep pockets to make acquisitions.
According to the latest Forbes 400, his net worth is $6.7 billion, making him the third-richest American behind Microsoft Chairman Bill Gates and investor Warren Buffett.
On Thursday, Metromedia said it agreed to a merger valued at about $530 million with music distributor Alliance Entertainment Corp. Last month, Metromedia bought movie producer Motion Picture Corp. of America for $32.5 million.