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Lions Gate proposes merger with MGM

By (Breaking Legal News)

Lions Gate is offering to combine its business with MGM in a deal supported by billionaire investor Carl Icahn, who owns stakes in both studios.

Lions Gate Entertainment Corp. said Tuesday it has sent a proposal for a combination with financially troubled Metro-Goldwyn-Mayer Studios Inc.

Lions Gate said the combined company would be owned by its shareholders and by MGM's creditors. These include Icahn.

Terms weren't disclosed, though a report in the Los Angeles Times said the deal would give MGM's lenders a 55 percent in the combined company. Lions Gate and MGM declined to comment.

Icahn said the deal is better than a current proposal to combine MGM with privately held production company Spyglass Entertainment.

Icahn has been trying to buy Lions Gate for more than a year but has been rebuffed by the boutique film studio. Icahn's tender offer for Lions Gate worth $7.50 per share expires Oct. 22.

Full post as published by Breaking Legal News on October 13, 2010 (boomark / email).