Weinstein Co. said to be in exclusive talks to sell assets to investors led by a former Obama administration official
Weinstein Co. has entered into a period of exclusive negotiations to sell its assets to a group of investors led by former Obama administration official Maria Contreras-Sweet, two people familiar with the matter said Tuesday.
Contreras-Sweet, the former head of the Small Business Administration, has been trying to acquire the troubled New York-based studio since early November and has financial backing from investors including Ron Burkle’s Yucaipa Cos. and Lantern Asset Management.
The talks intensified after the investor group made a second-round offer that improved the deal terms, according to another person close to the talks who was not authorized to comment and requested anonymity.
This person did not give specifics about the terms, but The Times has previously reported that a deal could be valued at about $500 million, including debt. Under the terms of the proposal, the investors would inject cash into the business and pay down liabilities to give the company a stronger financial footing, said a person with knowledge of the bid.
The new company would also create a litigation fund to help compensate alleged victims of Harvey Weinstein. Contreras-Sweet would take over as executive chairman of the company, which would get a new name.
A deal could be completed within a couple of weeks, though the talks could still fall apart, people close to the process said.
Representatives for Weinstein Co. and Contreras-Sweet declined to comment. Moelis & Co., the investment bank handling the sale, also declined to comment.
Talks with Contreras-Sweet appeared to hit a roadblock last week as Harvey Weinstein and his brother Bob Weinstein — who own more than 40% of the business — tried to push for a sale to Miramax, according to a person familiar with the matter. Miramax, the company the brothers founded in 1979 and left in 2005, said in a statement that it had not held talks with the brothers but was pursuing a purchase of the studio. However, Weinstein Co.’s management has pressed for a deal with Contreras-Sweet’s group, to the frustration of other bidders.
Contreras-Sweet had long been viewed as the front-runner in the protracted bidding process, largely because her group was the lone bidder that would keep the company relatively intact. Rebranding the company under female ownership could also offer the studio a fresh start. The competing bids would have been orchestrated through a Chapter 11 bankruptcy process.
Weinstein Co. appeared to be spiraling toward bankruptcy under a mountain of debt after its co-founder was accused of sexual harassment and assault by dozens of women in October. Weinstein, who was fired by the board Oct. 8, has denied all allegations of nonconsensual sex.
A sale to Contreras-Sweet’s coalition would put the company under majority female control and be completed outside U.S. Bankruptcy Court, people familiar with the offer said.
In addition to Miramax parent company BeIN Media, other bidders have included Santa Monica studio Lionsgate, private equity firm Shamrock Capital and New York-based production company Killer Content.
There’s still no guarantee that a deal will be reached. Weinstein Co. in October entered exclusive negotiations to sell to Thomas Barrack’s private equity firm Colony Capital, but those talks fell apart.
Deadline first reported on the exclusive negotiations with Contreras-Sweet’s group.
UPDATES:
3:40 p.m.: This article was updated with additional details on the talks with Contreras-Sweet.
This article was originally published at 11:45 a.m.
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