As the consortium led by construction magnate Ronald Tutor and investment firm Colony Capital nears the deadline to complete due diligence on its $675 million acquisition of Miramax Films, seller Walt Disney Co has given them another obstacle to overcome.
Disney wants the buyers to put up a non-refundable $40 million down payment on the deal by Wednesday, according to a report on NYTimes.com Monday. If they don’t agree, Disney could end their exclusive negotiating period and turn to other buyers, or pull the 611-film library off the market and proceed with distribution of the handful of unreleased Miramax movies (which it is already in the progress of doing).
Tutor was quoted as saying he would not put up that kind of money unless he was assured the deal will close. If Tutor and Colony falter, other bidders are waiting in the wings, including Miramax founders Harvey and Bob Weinstein, who have backing from investor Ron Burkle and New York hedge fund Fortress Investments. However, when that group came close to a deal last month, they wanted to pay only $565 million, at which point Disney balked and turned to the Tutor-Colony group.
The Miramax deal will not have a material impact on Disney’s bottom line, but another delay would represent a publicity problem as the sale process has now dragged out for about five months.
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