MGM files for possible IPO
Metro-Goldwyn-Mayer, the 88-year-old Hollywood studio that emerged from bankruptcy in late 2010, has filed for a possible public offering of its stock that would allow the former debt holders that are now its owners to start selling their holdings.
Beverly Hills-based MGM’s plans were disclosed in a brief statement explaining that it has filed a draft registration statement for an IPO with the Securities and Exchange Commission. There was no information about when the company might go through with the IPO or at what price.
Although it is private, MGM has publicly disclosed its quarterly financial results for the last year as part of an agreement with its owners. The company has become profitable by slashing its costs and selling its library of more than 4,000 movies and 10,000 television episodes to overseas networks and digital distributors.
It has had mixed success so far with its cautious return to the movie business, losing money on a minority investment in Sony Pictures’ “The Girl with the Dragon Tattoo” but posting a profit on “21 Jump Street.” Its larger-scale upcoming productions include the new James Bond picture “Skyfall,” “The Hobbit: There and Back Again,” and remakes of “Carrie” and “Robocop.”
A group of hedge funds and other investors that acquired MGM’s bonds over the last several years agreed in 2010 to convert that debt to equity as part of a bankruptcy plan valuing the company at about $1.9 billion. Most have no experience in the entertainment business and are believed to be eager to shed their stakes as soon as possible through an IPO.
Late 2012 may be a good time for MGM to go through with such an offering, as investors could be attracted to the high-profile releases of “Skyfall” and “The Hobbit” in November and December, respectively.
Bloomberg reported that MGM has hired investment banks J.P. Morgan and Goldman Sachs to manage its IPO.
A spokeswoman for MGM declined to comment.
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