UPDATE 2-Icahn ramps up MGM effort again
* Icahn launches second offer for MGM secured loans
* Offer at price of 53 cents per $1 in principal amount
* Conditioned on at least $1.6 bln principal tendered
* Tender, earlier offer expire at Spyglass voting deadline (Adds lawyer quote, details)
By Sue Zeidler
LOS ANGELES, Oct 26 (Reuters) - Billionaire investor Carl Icahn presented another offer to lenders of Metro-Goldwyn-Mayer on Tuesday, hoping to derail a proposed deal linking the troubled studio with Spyglass Entertainment.
Icahn is backing a proposal to combine MGM, home to the James Bond films, with studio Lions Gate Entertainment Corp (LGF.N). He offered to buy $1.6 billion in MGM secured loans at a price of 53 cents per $1 principal amount.
Last week, he offered to buy up to $963 million in MGM senior debt from creditors on the condition they them vote down the Spyglass proposal. The voting deadline is this Friday.
Icahn said on Tuesday both offers will expire at the voting deadline for the Spyglass plan on Friday.
MGM has struggled with heavy debt after a leveraged buyout in 2005.
On Monday, MGM sent a memo to creditors dismissing Lions Gate's claims of synergies and cost savings outlined in its merger proposal, made two weeks ago, a source familiar with the matter told Reuters. [ID:nN25276348].
The studio favors a plan that calls for Spyglass chiefs Gary Barber and Roger Birnbaum to take over a significantly slimmed down MGM following a prepackaged bankruptcy, the source said on condition of anonymity because the memo had not been made public.
A prepackaged bankruptcy is a faster method of reorganizing than a typical bankruptcy filing.
Icahn's latest offer is conditioned upon $1.6 billion of debt being tendered. If that amount is tendered, he said he will buy that amount, minus the amount of debt he has already accepted from his offer to buy $963 million of senior debt.
This amount plus the amount of debt currently owned by Icahn will approximate 51 percent of outstanding senior loans, he said in a statement.
"What you see here is a wrestling match at MGM's line of scrimmage for who will control the future of MGM at the onset of this case," said bankruptcy attorney Stefan Coleman, who is not involved in the dispute.
"If Carl Icahn can buy out enough of the secured class' interest, he will control that class and potentially reject the Spyglass deal in favor of the Lions Gate merger," he said.
Sources have said a group of powerful hedge funds including Anchorage Advisors and Highland Capital, who control about $800 million of MGM debt, are supporting the Spyglass deal.
These funds think the Lions Gate deal lacks clarity, would take longer than the Spyglass deal and could derail a long-sought production deal with Time Warner Inc (TWX.N) to produce two films based on "The Hobbit." [ID:nN21248436], the sources said.
Both Highland and Anchorage declined comment.
Icahn, who owns more than 30 percent of Lions Gate, also has a tender offer out to buy that studio's outstanding shares for $7.50 a piece. (Reporting by Susan Zeidler; Editing by Steve Orlofsky)
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