Kerkorian Could Be Close to Buying Orion

Las Vegas billionaire Kirk Kerkorian is negotiating to acquire beleaguered Orion Pictures, primarily for its substantial film library, and a decision is expected by mid- to late-week, sources close to the deal said Sunday.

One person familiar with the talks characterized the odds at “60-40” that Kerkorian would buy Orion from fellow billionaire John Kluge. The sources cautioned, however, that the talks were fragile and could easily unravel, adding that no decision is expected until Wednesday at the earliest.

The executive said the billionaires have discussed a price of about $300 million, but added that it is unclear whether Kerkorian--who last year bought Metro-Goldwyn-Mayer for $1.3 billion--wants Orion’s production arm, which operates far below the level of major Hollywood studios.

What Kerkorian and MGM Chairman Frank Mancuso value most, the executive said, is Orion’s 2,200-film library. They may want to spin the production end off to another party as part of a more complicated transaction, the executive said.

Orion is controlled by Kluge, who most analysts have expected to sell the studio. Orion in the late 1980s and early 1990s released a string of top films such as the Oscar-winning “Dances With Wolves” and “Silence of the Lambs,” but suffered such huge losses on other films that it fell into bankruptcy. In the last couple of years, Orion has released a batch of little-noticed films. Its most recent effort is “Eight Heads in a Duffel Bag,” starring Joe Pesci.

The Kerkorian talks are said to have taken Orion employees by surprise. One said there had been no visible sign that Kerkorian was looking at the books. Some executives were being told of the talks Sunday night, sources said.