Lions Gate Entertainment Corp. has approached Metro-Goldwyn-Mayer with a merger proposal, Reuters reports, and the idea has the support of corporate raider Carl Icahn.
As Lions Gate’s largest shareholder, Icahn is seen as crucial to any possible deal. He said Tuesday that a merger would “enhance value for all constituencies,” the story reports. Icahn, who also holds half a billion dollars of MGM’s debt, has previously expressed opposition to a merger.
Lions Gate disclosed the proposal in a filing with regulators, indicating that the combined company would be owned by its shareholders and MGM’s creditors.
Lions Gate is the studio behind TV and film hits including “Mad Men” and “Precious.” The company has been struggling with falling DVD sales and has been hurt by video piracy as well as slower consumer spending, the story reports. It has also been struggling to fight off a takeover bid by Icahn.
MGM, which is also struggling with economic issues and is saddled with about $4 billion in debt, brings assets such as a valuable library that includes the James Bond and Pink Panther franchises, the story says.