Hedge Funds Back Cerberus-Owned Studio For MGM Deal

Jun 23 2010 | 11:40am ET

Given the chance to play Hollywood kingmakers, a trio of hedge funds is backing a movie studio owned by private equity firm Cerberus Capital Management.

Spyglass Entertainment is the preferred choice of Anchorage Advisors, Davidson Kempner Capital Management and Highland Capital Management to run Metro-Goldwyn-Mayer, The Wall Street Journal reports. The three hedge funds are among the largest MGM creditors.

The deal with Spyglass isn’t done yet, and another deal with Summit Entertainment remains a possibility. But the hedge fund creditors would own more of the restructured MGM under a deal with Spyglass than under one with Summit.

Alternative investments ties are not the only thing drawing the hedge funds to Summit: The firms were apparently impressed by Spyglass chiefs Gary Barber and Roger Birnbaum’s plan for the studio. Barber and Birnbaum would serve as co-CEOs of MGM under the deal.

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