Lions Gate executives say they won’t overpay for Miramax or MGM
By APWednesday, February 10, 2010
Lions Gate: We won’t overpay for Miramax, MGM
LOS ANGELES — Lions Gate Entertainment Corp. executives said Wednesday they would not “overpay” for flagging movie companies Miramax Films or Metro-Goldwyn-Mayer Inc., but one executive said Miramax met most of the criteria for an acquisition.
The Walt Disney Co. is exploring all of its options on its Miramax subsidiary, which is winding down operations after the next six films hit theaters. Debt-burdened MGM has put itself up for sale in an ongoing bidding process.
Lions Gate Chief Executive Jon Feltheimer said any acquisition must immediately help profits, add a strategic benefit to its operations, and either add key personnel or result in immediate cost savings.
“We don’t overpay. And we’re not in a hurry,” Feltheimer said on a conference call with analysts. “Any transaction we make goes through this filter.”
Vice Chairman Michael Burns said Miramax “obviously is an asset that would fit into a lot of the criteria that Jon mentioned earlier” but said the key was whether the transaction would add to profits right away.
“We can’t talk about any deal specifically, but again it would be something that we would certainly look at,” Burns said.
Feltheimer said if the company did acquire the film library of a company like Miramax, it would not then sell some of the titles to a competitor such as The Weinstein Co., run by Miramax founders Bob and Harvey Weinstein.
The Weinsteins have also expressed interest in buying back Miramax, a studio they named after their parents, Miriam and Max. They sold the studio to Disney in 1993 for $80 million.
On Tuesday, Lions Gate said it posted a fiscal third-quarter net loss of $65.3 million, or 55 cents per share, compared with a loss of $97.8 million, or 84 cents per share, in the same period a year earlier. Revenue rose to $372 million from $324 million.
Shares in the Vancouver-based company run out of Santa Monica, Calif., fell 9 cents, or 1.7 percent, at $5.10 in afternoon trading Wednesday.
