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Sony group to buy MGM

Agrees to $3b deal for famed studio

A consortium led by Sony Corp. has agreed in principle to acquire famed Hollywood studio Metro-Goldwyn-Mayer Inc. for nearly $3 billion, MGM said late yesterday.

The company said it received a cash deposit of $150 million yesterday from Sony, along with private equity companies Providence Equity Partners Inc., Texas Pacific Group, and DLJ Merchant Banking Partners.

MGM said its management will recommend the deal, which it called a ''proposed merger" to its board, by Sept. 27.

Sony has agreed to pay $12 per share for MGM, 45 cents more than MGM's closing price of $11.55 yesterday on the New York Stock Exchange. The deal also calls for Sony to assume about $1.9 billion in MGM debt.

Sony's winning bid comes after Time Warner Inc. dropped out of the competition earlier yesterday. .

The sale would mark the third time billionaire investor Kirk Kerkorian has sold the film studio, once best known for its musical hits like ''Singing in the Rain" and ''Meet Me in St. Louis." Kerkorian, through his Tracinda Group, owns 74 percent of MGM's outstanding shares. The sale to Sony would net him about $2.1 billion.

Sony is expected to shutter MGM's current production, with the possible exception of the ''James Bond" franchise.

Time Warner had been seen as the front-runner for MGM going into the weekend. But Sony raised its offer, setting off a bidding war that Time Warner concluded it did not want.

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