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Sale of MGM to Sony OKd

December 18, 2004|Richard Verrier | Times Staff Writer

At a meeting lasting under 10 minutes, Metro-Goldwyn-Mayer Inc. shareholders signed off Friday on a deal to end the studio's 80 years as a stand-alone operation.

A small gathering of shareholders at MGM's Century City headquarters overwhelmingly endorsed an agreement to sell the historic film studio to an investment group led by Sony Corp. for about $4.9 billion in cash and assumed debt.

The vote's outcome was never in doubt because billionaire Kirk Kerkorian, who owns 74% of the studio, had given his blessing to the deal.

However, the sale isn't final just yet. It still needs the approval of European regulators, who are expected to make a decision sometime in the first quarter of 2005, and the consummation of financing.

MGM executives do not expect any obstacles to the sale, which cleared U.S. regulatory hurdles last week.

The merger includes MGM's valuable library of more than 4,000 movies, from "Legally Blonde" to the James Bond franchise.

After the formalities of the vote, MGM Chairman Alex Yemenidjian made brief comments to a few dozen shareholders and employees.

Standing beneath a movie screen displaying the studio's trademark lion, Yemenidjian thanked MGM employees for the studio's successes, including a 44% increase in the company's stock price over the last five years, and predicted the studio would continue to thrive under new owners.

The session drew no questions from shareholders.

Yemenidjian said it was unclear how the merger would affect the studio's workforce of about 1,400.

"It's a bittersweet moment for me," he said after the meeting.

The Sony group also includes investors Providence Equity Partners, Texas Pacific Group, Comcast Corp. and DLJ Merchant Banking.

MGM and its United Artists unit are expected to be preserved in a production entity overseen by Sony Pictures Entertainment in Culver City.

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