Disney Seeks $40 Million Upfront for Miramax
07-27-10
New York Times

LOS ANGELES — An investment group that includes the construction executive Ronald N. Tutor must make a nonrefundable $40 million payment toward the purchase of Miramax Films from the Walt Disney Company by Wednesday to move forward with a deal, according to people briefed on the sale.

Should the deadline pass with no action, Disney could take Miramax off the market or throw open the bidding again to other suitors.

Word of the deadline is the latest wrinkle in a months-long effort to reach a deal for Miramax, an independent film company that made movies like “Pulp Fiction” and “Shakespeare in Love” but has been virtually shuttered by Disney.

Potential buyers, including the co-founders of Miramax, Bob and Harvey Weinstein, have either made no offer after checking out a deal or have proposed terms that were far less than Disney wanted.

Reached on Monday, Mr. Tutor, who is the chief executive of the Tutor Perini Corporation, said he was blocked from discussing the proposed purchase by a confidentiality agreement that expires on Thursday.

Asked about the deposit, Mr. Tutor said: “You’ll know by Wednesday.”

Several people who were briefed on the sale — and spoke on condition of anonymity because of the confidentiality requirements — said the deposit was to be accompanied by a plan to finance the purchase for about $650 million plus as much as $25 million in closing costs, though signed commitments from lenders are not required by the Wednesday deadline.

The bid remains complicated by questions about the distribution of film franchises like the “Spy Kids” and “Scary Movie” series, in which the Weinsteins, who ran Miramax before leaving in 2005, continue to hold rights.

Mr. Tutor’s group includes the private equity firm Colony Capital, which has been guided in the transaction by Richard D. Nanula, a former chief financial officer of Disney who joined Colony two years ago.

The group was granted an exclusive bargaining window for Miramax after talks with a group led by the Weinsteins and their principal backer, the investor Ron Burkle, collapsed amid dickering over a bid that was lowered to $565 million from about $600 million during a similar exclusive bargaining period.

On Monday, the Burkle-Weinstein group appeared poised to re-enter the bidding if the Tutor effort failed, according to people who were briefed on that bid, although Disney may chose not to restart talks with the group.

A Disney spokeswoman declined to comment, as did a spokesman for the Weinsteins.

Colony, an equity firm founded by Thomas J. Barrack Jr., has already dipped its toe into the entertainment business through unusual distressed investments, including Michael Jackson’s Neverland Ranch.

Disney has been publicly trying to sell Miramax since March. The proceedings have involved a torrent of media miscues, the collision of big personalities — Harvey Weinstein lashed out at Robert A. Iger at the recent Allen & Company gathering in Sun Valley — and endless delays as lawyers for the parties scrutinize every step.

Although some in Hollywood have started to see Disney’s inability to close a deal as an embarrassment, the asset is a small one that wouldn’t have a material impact on Disney’s bottom line one way (a sale) or another (Disney yanks it off the market).

Miramax, which once had 500 employees, was pared down last fall to essentially no staff, a move by Disney to make it more attractive to a buyer.

As talks with various potential buyers have dragged on, Disney has continued with plans to release the handful of Miramax movies still on the shelf.

These films include Julie Taymor’s “Tempest,” now set for a December release, and “The Switch,” a Jennifer Aniston comedy that arrives in theaters on Aug. 20.

As of late last week, according to people who were briefed on the sale, the Tutor group was still scrambling to lock up financing.

Mr. Tutor suggested that any move to pay a deposit would settle such questions. “Nobody’s going to put up that kind of money if there’s any doubt,” he said.

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