Metro-Goldwyn-Mayer Inc has rejected an over $2 billion takeover offer by Indian conglomerate Sahara India Pariwar as creditors are looking for alternative plans to bail out the struggling Hollywood studio.
Sahara India Parivar chairman Subrata Roy said on Friday that the offer was rejected within hours of his conference call with creditors on Tuesday.
MGM owes its creditors around $4 billion against Sahar's offer of $2 billion.
MGM's creditors are now negotiating a restructuring plan for the studio that could include a prepackaged bankruptcy, he said.
Roy, who is said to have an uncommon knack for getting things done, however, failed to pull it off this time. Also, it is not known how Sahara was going to finance the deal if he could clinch it.
The Sahara India Parivar is built on a savings scheme of its flagship unit, Sahara India Financial Corporation, which boasts of 25 million savings deposit accounts.
Sahara India Financial Corporation has around 415,000 agents across the country mobilising small deposits.
Roy's business empire now spans television channels, real estate, film production and a now lost aviation business. The group is also into the business of Sports.
Sahara, however, is handicapped by an RBI order limiting Sahara India Financial Corporation's "discretionary investments".
RBI had, in 2008, frozen Sahara's deposits after finding that it had "continuously violated directions/guidelines". The company is reported to have later agreed to stop taking public deposits by 2015.
Analysts see the so-called bid to acquire MGM for $2 billion against its $4 billion debt as another publicity attempt by Roy (See: Sahara India Pariwar in talks to buy Hollywood studio MGM)