A deal could be announced as early as this week, people familiar with the situation said, assuming the talks don’t collapse at the last minute.
The privately traded MGM was valued at around $ 5.5 billion, including debt, last December. Its stock price has skyrocketed in recent days, from around $ 105 a share in mid-May, before talks were announced, to around $ 140 a share on Monday morning.
The legendary film and television studio has long been seen as in the game, but hired investment banks LionTree LLC and Morgan Stanley late last year to begin a formal process.
News of advanced negotiations comes just a week after AT&T Inc.
has agreed to combine its media assets with Discovery Inc.
and forming a new company, an agreement that should spark even further consolidation in the media space.
Talks between Amazon and MGM have continued since the start of this year, people close to the two companies said. Amazon and MGM have had exclusive talks in recent weeks, people said. The MGM board was briefed on the matter on Sunday evening, a person familiar with the situation said. There is no guarantee that they will eventually come to an agreement.
Acquiring one of the world’s most iconic entertainment brands would be a tech giant’s most aggressive foray into Hollywood to date.
The studio is best known for classics like “Singin ‘in the Rain” as well as “Rocky” and “The Pink Panther”. MGM has a library of titles, including the James Bond franchise, which in contemporary Hollywood is an asset that can be used to drive subscriber registrations to Amazon’s Prime Video streaming service.
MGM also has a television studio whose shows include Hulu’s hit “The Handmaid’s Tale” and FX’s “Fargo”. He also owns the Epix pay TV channel.
MGM shares the James Bond franchise with a holding company owned by the Wilson / Broccoli family, which co-owns the copyrights to existing Bond films and controls the future of the franchise. The upcoming James Bond film, “No Time to Die,” has been repeatedly delayed due to Covid-19 and is now slated for release in October.
Forbes and The Information have previously reported Amazon’s interest in MGM.
Amazon continued to invest billions of dollars in its film and television operations as well as live sports to support the company’s Prime membership offering. The company is currently in the process of producing a television series based on “The Lord of the Rings,” which has a first season budget of $ 465 million.
Amazon has spent hundreds of millions of dollars to acquire major studio theatrical releases, such as Paramount Pictures’ upcoming “The Tomorrow War” starring Chris Pratt. It has also aggressively pursued a deal to stream Sony Pictures Entertainment movies on its service, a person familiar with the situation said. Sony Pictures finally reached multi-year deal with Netflix Inc.
He also continues to invest heavily in live sports. In March, Amazon struck a long-term deal to air the NFL Thursday Night franchise for an average annual fee of $ 1.2 billion.
The MGM deal would mark the latest twist in what has been a difficult journey for the studio. In 2018, he fired then CEO Gary Barber for having preliminary conversations with Apple. Inc.
for a sale valuing the studio at over $ 6 billion. Since then, MGM has not had a CEO, but rather a “CEO’s office” made up of company executives. Its board is chaired by hedge fund manager Kevin Ulrich, co-founder of New York hedge fund Anchorage Capital Group, MGM’s largest shareholder.
Write to Juliet Chung at [email protected], Joe Flint at [email protected] and Erich Schwartzel à [email protected]
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