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Lionsgate Offers to Combine with MGM

Lionsgate, along with investor Carl Icahn, has proposed to combine its business with troubled Metro-Goldwyn-Mayer. Icahn owns stakes in both studios.Financial terms have not been disclosed, however the Los Angeles Times is reporting that an agreement woul

Lionsgate, along with investor Carl Icahn, has proposed to combine its business with troubled Metro-Goldwyn-Mayer. Icahn owns stakes in both studios.

Financial terms have not been disclosed, however the Los Angeles Times is reporting that an agreement would give MGM's lenders a 55 percent stake in the combined company. MGM, which plans to file for bankruptcy, has more than $4 billion in debt.

"We believe that this combination of Lionsgate and MGM would enhance value for all constituencies and we believe this proposal as submitted is far better for MGM holders than the current proposal to combine MGM with Spyglass," says Icahn. "In addition, we also believe such a combination transaction would enhance the value of Lionsgate shares. Our support for this combination is conditioned on the combined company having satisfactory corporate governance provisions."

Previous offers to bail out MGM have included proposals from Sahara India Pariwar ($2 billion) and Time Warner ($1.5 billion), both of which were rejected.

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