LOS ANGELES, June 28 -- Dutch entertainment giant PolyGram has made a cash offer worth as much as $1.3 billion for the Metro-Goldwyn- Mayer movie studio, a published report said Friday. The Los Angeles Times, citing unnamed sources, reported the PolyGram offer is among the richest of the six received for MGM by French owner Credit Lyonnais, which is expected to select a winning bid within a few weeks. Other front-runners are believed to be Rupert Murdoch's News Corp. and producer James G. Robinson's Morgan Creek. The sources told the newspaper that none of the finalists came near the range of $1.5 billion to $2.5 billion that Credit Lyonnais was seeking. Other bidders, who were required to submit final offers this week, are believed to include producer Arnon Milchan's New Regency, current MGM management led by Chairman Frank Mancuso and an investor group including German businessman Rolf Deyhle and former Drexel Burnham Lambert executive Peter Ackerman. PolyGram, which is 75 percent owned by electronics powerhouse Philips NV, has the world's leading music operation and owns several mid-level film producers and distributors, including Gramercy, Interscope, Propaganda and Working Title. It has long been expected to expand its Hollywood holdings. Buying MGM would help PolyGram's distribution and give it a sizeable library of about 1,600 films, including the 17 James Bond titles, the 'Rocky' series, 'Annie Hall,' 'Thelma and Louise' and 'West Side Story.' Investment banker Lazard Freres is conducting the auction on behalf of Credit Lyonnais, which gained control of the studio in 1992 when owner Giancarlo Parretti defaulted on loans.
The bank must sell a controlling stake in MGM by May 1997 under U.S. law. PolyGram has the deepest pockets of any bidders, with no debt, assets of $5 billion and credit lines totalling $1.5 billion. MGM had been the poorest performer among Hollywood studios over the last decade, but has managed to improve over the last year under the leadership of former Paramount studio chief Mancuso with 'Species,' 'Get Shorty,' 'Leaving Las Vegas,' 'GoldenEye' and 'The Birdcage. ' In 1995, it grossed $333 million domestically from 15 films, compared with $149 million from eight in 1994.
