April 14, 2010 / 7:17 PM / 8 years ago

UPDATE 1-Gores brothers up bid for Disney's Miramax - source

* Gores brothers raise bid for Miramax - source

* Miramax auction gains momentum, draws three bids

* Sources say deal could close as early as within weeks

* Disney, bidders actively meeting in last week (Adds comments from bidder in paragraphs 14-15, additional byline)

By Sue Zeidler and Alex Dobuzinskis

LOS ANGELES, April 14 (Reuters) - Bidding for Walt Disney Co’s (DIS.N) Miramax Films unit intensified this week and one of three groups, led by Alec and Tom Gores, has raised its $550 million offer for the art-house studio, a source familiar with the matter said on Wednesday.

It was unclear how much more was offered, but the source said the Gores raised their bid in the last day.

The Gores are competing with a joint $600 million bid by Hollywood producers Bob and Harvey Weinstein with billionaire Ron Burkle, and a $650 million bid by an investor group being advised by embattled film executive David Bergstein, according to several sources familiar with the auction.

A source with knowledge of the situation said the Gores brothers had initially bid $550 million cash with another brother Sam Gores, head of Paradigm Talent Agency, acting as advisor.

Momentum has picked up for the auction, which had a slow start and sources say Disney has recently held various meetings with suitors for Miramax, with a library of more than 600 films including “Pulp Fiction,” and it been trying to fetch $700 million for the division.

Disney has declined to comment. Representatives for the Gores and Weinsteins have also declined to comment.

One bidder said he believed Disney could close a deal to sell its Miramax Films unit within weeks.

Some have said they see the joint bid by the Weinsteins and Burkle as the strongest, given the Weinsteins founded Miramax and sold it to Disney in 1993 and have a first-hand knowledge of the assets.

But the source familiar with the matter said the Gores brothers were “very much in the hunt.”

Alec Gores is founder of private equity firm The Gores Group, and Tom Gores runs Platinum Equity. If they buy Miramax, the brothers could ramp up its shuttered production division, another source familiar with the bids said.

Under the Weinstein/Burkle bid, Burkle’s Yucaipa Cos, which has grocery store holdings, would own Miramax and let the Weinsteins run it, said a source with knowledge of the situation.

    Hollywood insiders say Bergstein’s bid could be hampered by a court action that creditors filed last month seeking to force several of his companies into bankruptcy.

    Nevertheless, Bergstein told Reuters he was intent on buying Miramax and that his group might also raise its bid.

    Bergstein, best known for running distribution company THINKFilm, said he has not been informed that the Gores raised their bid, but he called them a “well-funded organization.”

    “If they raise their bid we’re going to raise our bid, we have a lot of room to go up if necessary,” he said.

    Bergstein has told Reuters that Miramax’s value has plenty of room for future growth and that he expects Disney would likely close the deal within two weeks.

    “I wouldn’t be surprised if they made the decision in the next week,” said another source familiar with the bids.

    Others have cautioned that Disney could still choose to walk away.

    Disney, which is scheduled to report earnings on May 11, is looking to sell the unit, which it bought for $80 million, because it does not fit in with its increased focus on big branded and franchise films.

    However, Disney may also want to retain a stake in some of Miramax’s content going forward, according to the source involved in the deal making.

    “I can see them wanting some upside in the projects that have been identified as having sequels,” a source said, referring to Miramax’s “Scream” and “Spy Kids” lucrative films.

    Reporting by Sue Zeidler and Alex Dobuzinskis; Editing by Richard Chang

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