- Associated Press - Monday, October 25, 2010

LOS ANGELES (AP) - Boutique movie studio Lions Gate says its proposed merger with Metro-Goldwyn-Mayer would save more than $100 million a year in overhead and boost cash flow on top of that by more than $120 million over five years.

The company made details of its proposal public in a letter to Metro-Goldwyn-Mayer Inc. on Monday. Documents have also been filed with the Securities and Exchange Commission.

The proposal, first made in July, was updated this month with the backing of Lions Gate Entertainment Corp. shareholders who control about 71 percent of the company’s shares. The group includes Carl Icahn.

In the merger proposal, MGM creditors owed more than $4 billion would receive about a 55 percent stake in the new company, which would absorb MGM and carry about $1.1 billion in debt.

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