On November 15, before the latest 007 film "Casino Royale" was released in North America, Blue Valley Capital finally reached an agreement with the remaining shareholders of MGM Holdings, including Providence Equity Partners, Texas Pacific Capital Fund and DLJ Commodity Bank Partners.
Blue Valley Capital will acquire the remaining 60% of MGM Holdings held by the three investment institutions for US$1.5 billion, thereby taking MGM Pictures into its pocket.
The reason why the acquisition of MGM Pictures was completed at this time was not that simple.
In addition to ongoing acquisition negotiations with these three investment institutions, during this period, American Express Bank also acquired $1 billion of MGM Studios debt.
Yes, just last month, Standard Chartered Bank acquired American Express Bank for US$850 million to expand its private banking business.
Speaking of American Express, many people have heard of it. For example, the most well-known American Express Centurion Black Card can be said to be the standard configuration for many wealthy people.
But in fact, what Standard Chartered Bank acquired this time was only the American Express Bank business under American Express, not its card and travel businesses.
Founded in 1850, American Express is a diversified global travel, financial and network services company and the world's largest travel management company.
American Express has more than 84,000 employees and more than 1,700 travel offices worldwide, providing debit and credit cards, traveler's checks, travel, financial planning, investment products, insurance and international banking services.
There are three branches under American Express:
They are American Express Travel Services, American Express Financial Advisory and American Express Bank.
Among U.S.-based banks, American Express has one of the largest international branch networks, with correspondent banking in 47 countries, including services for banks that do not have local operations and private banking.
This time, Standard Chartered Bank's acquisition of American Express Bank will double the scale of its US dollar settlement business, and will enable the entire Standard Chartered Bank to have direct euro and yen settlement operations.
At the same time, the transaction will provide a strong impetus for the development of Standard Chartered Bank's private banking business - the acquisition will shorten the development plan of Standard Chartered Bank's private banking business by 2 to 3 years.
As mentioned before, when the consortium led by Sony acquired MGM Studios in 2005, MGM Studios already had $2 billion in debt.
As of now, its debts have reached 2.2 billion US dollars, and these debts have left MGM with nearly 100 creditors...
After acquiring $1 billion of the debt, American Express Bank, a subsidiary of Standard Chartered Bank, became the largest creditor of MGM Pictures. Holding these debts in American Express Bank posed a bankruptcy threat to MGM Pictures and was one of the main reasons why the other three investment institutions finally decided to sell their shares to Blue Valley Capital.
After all, the box office performance of the movie "Casino Royale" is still unknown, but the huge debt of MGM Studios is already a real threat. After MGM Studios began to "go down the drain" and almost gave up the production of all films except the 007 series and the Pink Panther series, this company, which was once one of the Big Eight, showed no signs of improvement.
Moreover, even if "Casino Royale" can perform well, it is only one movie after all. It is impossible to say that the entire film company can only rely on this movie. Can it release a 007 movie every year?
However, Barron knows that the box office of "Casino Royale", which will be released in North America on November 17, is really good - it will be the highest-grossing 007 movie so far.
However, the production of this film also involved Sony's Glenn Graduate Pictures, and the distribution also belonged to Sony Pictures...
The box office share that MGM Pictures can get from this movie will not be too high.
But at least this is a good start for a new era of MGM Pictures.
After completing the acquisition of MGM Pictures, Blue Valley Capital announced that it would merge the three companies they acquired, including MGM Pictures, Marvel Entertainment and Summit Entertainment, to form the Marvel-MGM Group.
In this way, Marvel-MGM Group will own three film and television production companies: MGM Pictures, Marvel Pictures and Summit Entertainment.
Marvel-MGM Group also obtained a $500 million loan financing from Standard Chartered Bank. In addition to the ongoing "Iron Man" and the first "Twilight" "Twilight", it will also launch new projects "Rocky" and "The Hobbit" for MGM Pictures.
"Rocky" is a well-known series of films once produced by MGM, starring Sylvester Stallone. However, after the release of "Rocky 5" in 1990, the series was frozen due to poor reputation and box office failure.
However, this series is still very well-known in the United States, and Barron knows that the box office performance of "Rocky 6" that was released later was also good, so he decided to restart the Rocky series and release the sixth film in the series in the next one or two years.
As for "The Hobbit", it was jointly launched by MGM and Warner Pictures in the original time and space. MGM owns half of the copyright of this prequel story of "The Lord of the Rings". It will become a very successful series in the future and can obtain extremely high returns.
In Barron's previous life, MGM was facing bankruptcy, so although The Hobbit was still co-produced by them and Warner Bros., the film's distribution was replaced by Warner instead of MGM.
Now they will definitely not let this happen again, and not only that, Marvel-MGM Group will try to acquire New Line Company from Warner Pictures to obtain the complete rights to "The Hobbit".
As we all know, New Line Studios achieved great success by successfully launching the "Lord of the Rings" trilogy.
But it is precisely because of the success of "The Lord of the Rings" series that New Line Pictures has developed path dependence and still believes that fantasy movies similar to "The Lord of the Rings" will continue to be successful.
Therefore, three years ago, after the release of "The Lord of the Rings" trilogy, New Line Studios continued to invest huge amounts of money to produce a series of fantasy films, but it turned out that these films did not achieve the same results as "The Lord of the Rings" trilogy, but instead caused New Line Studios to continue to lose money.
Although New Line Company nominally belongs to Warner, it has great independence and has independent production and distribution rights.
But because of the continued losses, Warner eventually decided to merge with New Line Studios and carried out massive layoffs. Even the two founders of New Line Studios left. It can be said that New Line Studios thus withdrew from the stage of history.
The production of "The Hobbit" also encountered many twists and turns. Initially, New Line Studios obtained the film and television rights of "The Lord of the Rings" trilogy and "The Hobbit", but after the success of "The Lord of the Rings" trilogy, the release of "The Hobbit" was repeatedly delayed.
The reason is that the script and director of this movie are uncertain. Peter Jackson, the director of "The Lord of the Rings" trilogy, refused to continue directing "The Hobbit", and the market was not optimistic about the prospects of "The Hobbit" at this time.
Even in the original book, "The Hobbit" is not like "The Lord of the Rings", which only has one film, but New Line Pictures has the idea of expanding "The Hobbit" into a trilogy. All these make this movie full of variables.