Icahn ups his offer to MGM creditors, again (WSJ, LAT, NYP, DH)

By Nancy Tartaglione

Tomorrow, creditors are set to vote on a plan to send MGM into bankruptcy court which would relieve it of a crushing $4 billion debt load. But, if Carl Icahn has his way, a last-minute plot twist will scuttle a deal that would see Spyglass take a nearly 5% interest in MGM and leave Gary Barber and Roger Birnbaum at the helm.

Icahn has sweetened an offer to buy debt from other MGM creditors in an effort to upend the plan before them. In an 11th-hour move, the activist investor, who has amassed about 13% of MGM's debt, is pushing a plan in which the Lion would merge with Lionsgate. He's now offering 50 cents on the dollar for MGM debt with the stipulation that debt holders vote against the Spyglass plan.

This is the third offer this week that Icahn has made to buy the studio's debt.

Meanwhile, MGM creditors who oppose the Spyglass plan are trying to reach a last-minute compromise, The New York Post reports.

Some lenders are complaining the Spyglass proposal lacks key details, including who would gain control of MGM's board when it emerges from bankruptcy.

"I think the decision is whether we go with the Spyglass deal now and hope we work through the governance issues or vote it down," one source told the Post.

According to The Wall Street Journal, Barber and Birnbaum "are behaving as if their deal will go through. They have parking spaces at MGM and have already helped the studio with a key project: two 'Hobbit' films in partnership with Warner Bros."

The creditors backing the Spyglass plan hold their own "blocking position" of over one-third of MGM's debt. The result could be a stalemate that would push the struggle for MGM into a prolonged final act, the Journal notes.