Yemenidjian
NEW YORK -- MGM chairman-CEO Alex Yemenidjian insisted Tuesday that the company is worth between $4.5 billion and $6 billion, a significant premium to the current stock price.
MGM shares closed up 4.1% at $10.41, representing a market capitalization of just under $2.6 billion.
Yemenidjian, in a presentation at the Bear Stearns media conference in Palm Beach, Fla., seemed intent on quelling rumors that the Lion might be for sale for anything less.
He said MGM has a $1.7 billion credit line. Under a covenant with lending banks, that facility is meant to be half of the appraised value of the company's film library, or $3.5 billion -- a figure Yemenidjian called conservative. Then there's the movie studio, TV interests (including dozens of international channels) and the strong brand.
Yemenidjian's comments came as Wall Street and industry players continue to ponder the future MGM and the endgame of owner Kirk Kerkorian. The company is mentioned as a potential player in just about every media deal but is hampered by its small size.
Wall Streeters note that the Lion doesn't have quite enough cash for a big solo acquisition that would take it to the next level. Issues of price and management control slow things down when MGM talks with other companies about selling itself or merging. They also suggest that many library titles are tied up in long-term deals, often with overseas broadcasters.
MGM came close to merging with Sony and, more recently, approached Vivendi Universal about the French conglom's U.S. entertainment assets.
Contact Jill Goldsmith at
jill.goldsmith@variety.com