D'Works library paged
Par could sell titles for between $900 mil and $950 mil
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The sheet amounts to an agreement in principle to sell the lucrative library for between $900 million and $950 million. That price would subsidize more than half of the $1.6 billion pricetag Par paid to acquire DreamWorks.
While the full details of the agreement are not yet known, Quadrangle and Providence, two equity groups that had surfaced in reports earlier in the week, are thought to be main players.
Both already have stakes in MGM, with Providence, the company's largest shareholder, holding a 29% stake.
Individual investors may also come in on the DreamWorks library deal, which is considered not only central in enabling the studio purchase but in appeasing Wall Street; many analysts said without it, the studio deal could turn costly and in turn drive down Viacom's stock.
If Quadrangle or Providence indeed wound up with stakes, it would give the companies an unusually large piece of film libraries but would not likely raise regulator eyebrows.
Library deal will probably close in January, after Par's acquisition of the studio is complete.
Though small, DreamWorks' library includes repeatable pics, such as "Old School" and "The Ring," in addition to prestige pics like "American Beauty" and "Road to Perdition." Many are recent titles still working their way through output deals and other windows.
Viacom chief financial officer Michael Dolan would not confirm the term sheet but said that private investors made the most sense as a buyer.
"The library is very stable but it has a declining value over time," he said. "That's not the profile of a public company or a growth company -- it's the perfect profile for a financial sponsor."
