Merrill Lynch looking to revise MGM deal terms: paper

(Reuters) - Merrill Lynch MER.N is examining its contract with Metro-Goldwyn-Mayer's United Artists as the bank looks to revise the deal on more favorable terms, the New York Post reported, citing sources close to the situation.

United Artists, the film company run by actor Tom Cruise, last year secured $500 million financing through Merrill Lynch to fund 15 to 18 movies over the next five years.

As a safeguard against Merrill's moves, MGM has retained Goldman Sachs (GS.N) as a strategic adviser to raise equity for film financing as well as other alternatives, including a potential sale of the famed studio, according to three people involved in or close to the situation, the report said.

There were reports last year that Goldman Sachs and Deutsche Bank had withdrawn from underwriting $1 billion in financing for MGM.

Merrill is looking for any event that might trigger a default on the loan and open the door to renegotiations, the paper said citing sources.

According to a source, the terms of the original financing agreement were so favorable to United Artists that Merrill and its syndicate of lenders would love to get out of it entirely.

Merrill Lynch, Goldman Sachs and MGM were not immediately available for comments.

Earlier this month, Cruise's movie partner Paula Wagner resigned as chief executive of United Artists to make movies for herself, leading to speculation that the superstar might leave soon.

MGM Chairman Harry Sloan said on Aug 14 that Cruise will stay a "full partner" at the studio in an effort to quell such rumors.

MGM is owned by a consortium of companies including private equity firms Texas Pacific Group and Providence Equity Partners, Sony Corp (6758.T) and Comcast Corp (CMCSA.O).

(Reporting by Saumyadeb Chakrabarty in Bangalore; Editing by Andrew Callus)