Sony in frame for £2.8bn MGM bid

SONY appears to be considering a bid as high as $5bn(£2.8bn) for film studio Metro-Goldwyn-Meyer and is reportedly seeking exclusive negotiations with the firm.

Insiders say Sony has sent a letter of intent to MGM and is examining the company's financial statements ahead of an expected bid.

Sony is believed to have insisted that MGM deal with it exclusively, which some say could become a sticking point with billionaire Kirk Kerkorian who owns 75% of the company.

MGM has pushed back its annual shareholders meeting from next Wednesday to 29 June so it can consider 'strategic alternatives'.

It is believed Sony would team up with DLJ Merchant Banking and private equity firms Texas Pacific and Providence Equity Partners in any bid for the studio, and would amalgamate MGM with its Sony Pictures Entertainment division.

Previously leaked letters have suggested Sony and its three partners would provide $1.5bn in equity financing while investment bank Credit Suisse First Boston would put up $3.5bn of debt financing.

The glittering prize for Sony would be MGM's 4200-title film library, which includes the Pink Panther and James Bond series. Previous potential MGM mergers have fallen through at the last minute.