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Acquisition Co. (Safari) was formed. In an effort to secure
financing for a Safari bid, Messrs. Lerner and Ackerman met with
a Japanese company and a number of major film distributors,
including Twentieth Century Fox.
B. Safari Indicates Its Interest in New MGM
On April 17, 1996, Messrs. Ackerman and Seiler wrote a
letter to Mr. Peter R. Ezersky, managing director of Lazard
Freres, submitting Safari’s preliminary indication of interest in
acquiring New MGM. The letter stated an approximate range in
which Safari might be prepared to bid ($1.95 billion to $2.5
billion) and mentioned a number of conditions to be satisfied
before any bid would be final and effective. When this bid was
submitted, Safari had not completed its due diligence of New MGM.
In formulating its final bid, Safari hired Donaldson, Lufkin &
Jenrette Corp., as its financial adviser, and Houlihan, Lokey,
Howard, & Zukin Capital (Houlihan Lokey), as its valuation
adviser.
On April 24, 1996, Lazard Freres faxed a memorandum to
Capella Films confirming a visit to MGM on May 1 to 3, 1996, and
providing a draft list of information that was to be available
during that time in the New MGM data room. The New MGM data room
was established in MGM’s offices in Santa Monica, and each of the
“qualified” bidders was permitted to bring in a team of advisers
to investigate MGM’s company information.
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