Monday, Sept. 13, 2004 | 11 a.m.
BLOOMBERG NEWS
Time Warner Inc., the world's largest media company, withdrew its bid today for Metro-Goldwyn-Mayer Inc., saying it could not reach agreement on the price of the film studio.
"Although MGM is a valuable asset, we have decided to withdraw our bid," Time Warner Chief Executive Richard Parsons said in a statement. "As we pledged to our shareholders, we approach every potential acquisition with strict financial discipline. Unfortunately, Time Warner could not reach agreement with MGM at a price that would have represented a prudent use of our growing financial capacity."
A group of investors led by Sony Corp. raised its offer for Kirk Kerkorian's MGM to close to $5 billion to thwart a bid from Time Warner, the Wall Street Journal reported today.
The group, whose offer includes assuming $2 billion in debt, raised its bid by 75 cents a share to about $12 from $11.25 a share, the newspaper said, without saying where it got the information. Movies account for about 10 percent of sales at Sony, producer of "Spider-Man."
Keita Sanekata, a spokesman at Tokyo-based Sony, declined to comment on the Wall Street Journal report.
"It's an important milestone that they are showing financial discipline," said Angela Kohler, a media analyst with Pittsburgh-based Federated Investors Inc., of Time Warner's decision. "MGM was incremental to growth, but it wasn't a crucial acquisition."
Federated owns 2.8 million shares of Time Warner among its $27 billion in assets.
Time Warner shares rose 19 cents to $16.70 at 12:33 p.m. in New York Stock Exchange composite trading today. MGM shares rose 26 cents to $11.37.
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