| LOS ANGELES/NEW YORK
LOS ANGELES/NEW YORK Walt Disney Co has struck a deal to sell Miramax, the studio behind such films as "Trainspotting" and "No Country for Old Men," for more than $660 million to a group that includes construction magnate Ron Tutor and investment firm Colony Capital LLC.
The deal marks the culmination of a drawn-out sale that attracted star-studded bidders, including the Weinstein brothers, who founded the studio.
The new owners will focus on maximizing the value of Miramax's library, a source familiar with the situation said. No production operations exist at this time and there are no current production plans, the source said.
The sale underscores Disney's plans to focus its film resources on bigger film properties such as "Pirates of the Caribbean" and exploit them across various platforms.
The sale to the group Filmyard Holdings, which comprises Tutor, Colony Capital and other partners, includes rights in more than 700 Miramax movie titles, including Academy Award winners such as "Chicago" and "Shakespeare in Love," Disney said.
Colony Chairman and CEO Thomas J. Barrack Jr, who founded the private equity firm, is also personally investing alongside Tutor and Colony, the source said.
Tutor and Colony declined comment on details of the deal or future plans.
The purchase price is about four times Miramax's cashflow, and about half the purchase price is covered by receivables, the source said.
Disney bought Miramax 17 years ago for $80 million.
While Miramax has continued to pump out critically acclaimed films such as "Doubt," it has not made big commercial hits like "Pulp Fiction" and "Chicago" for some time.
With its family-friendly focus, Disney viewed Miramax's edgy mix of films as a poor fit.
"Although we are very proud of Miramax's many accomplishments, our current strategy for Walt Disney Studios is to focus on the development of great motion pictures under the Disney, Pixar and Marvel brands," Disney Chief Executive Officer Robert Iger said in a statement.
"It turns the page on Disney's foray into non-Disney branded films and completes their focus on franchise properties," said Gabelli & Co analyst Chris Marangi. "They're also finding promising areas of growth in new media, especially in areas where they can monetize Disney properties."
"They are harvesting something mature and using the cash to invest in a more emerging growth space," said RBC Capital Markets analyst David Bank.
Revelations that Disney was floating a sale of Miramax first surfaced in January. Tutor, CEO of construction giant Tutor-Saliba Corp, entered into exclusive negotiations in early June.
Los-Angeles-based Colony was founded in 1991. Since then, it has invested $45 billion in over 12,000 assets, according to its website.
Colony has links with a number of celebrities. It co-owns the late Michael Jackson's Neverland estate in California, and it formed a partnership with photographer Annie Leibovitz to recapitalize some of her debts.
Many entities were linked to talks on a Miramax purchase, including billionaire investor Ron Burkle and movie studios Summit Entertainment and Lions Gate Entertainment.
The Miramax sale is expected to close between September 10 and year-end, Disney said.
Shares of Disney closed down 2 cents at $33.69 on the New York Stock Exchange on Friday. The stock has risen about 5.5 percent this year.
(Additional reporting by Jennifer Saba in New York and Sakthi Prasad in Bangalore, Franklin Paul in New York; Editing by David Holmes, Lisa Von Ahn and Matthew Lewis)