$4.5 million is breakup fee for Spyglass MGM deal

MUMBAI: Metro-Goldwyn-Mayer‘s deal talks with Spyglass Entertainment carry a $4.5 million breakup fee that Spyglass owners are bound to receive in the event the deal falls through.

Breakup fees are not unsual in the deal world and generally guarantee suitors that they are a seller‘s first choice. The deal plan calls for Spyglass co-heads Gary Barber and Roger Birnbaum to roll their Cypress Entertainment film library, including films like Seabiscuit and The Sixth Sense into MGM.

MGM lenders have valued the company at $1.9 billion. It is learnt that Time Warner, that offered to pay about $1.6 billion in cash for MGM, may still be interested at that price, but is awaiting a response.