Mega-Producer, The Weinstein Company, Shunned by Peers

Mega-Producer, The Weinstein Company, Shunned by Peers

Mega-Producer, The Weinstein Company, Shunned by Peers

$CLNS, $DIS, $GS, $AGO, $AMCX

 The Weinstein Company (TWC) has entered talks to sell the bulk of its assets to private equity firm Colony Capital, the companies said late Monday, as the film production company looks for stability after firing co-founder Harvey Weinstein the resignation of the majority of its Board

TWC confirmed its Board of Directors is to meet Tuesday.

The TWC board has shrunk to just 3 members following the resignation and departure of 5 others in the wake of the sexual assault accusations against co-fonder Harvey Weinstein.

So far Harvey Weinstein has denied having non-consensual sex with anyone.

TWC is of Hollywood’s most influential forces since it launched in October 2005. The company produces and distributes independent films. Its TWC Television arm produces the long-running reality series “Project Runway.”

TWC does not operate a film studio, and as such has few physical assets.

Thomas Barrack, the founder and Executive Chairman of Colony Capital, a friend of President Donald Trump who chaired the President’s Inaugural Committee, has reportedly injected capital into TWC and is offering to take control or outright by The Weinstein Comapany

Colony Capital and the Qatar Investment Authority, the sovereign wealth fund of Qatar, in Y 2010 bought the Miramax studio, the original studio founded by the Weinstein brothers, in Y 1979. The 2 brothers sold Miramax to Walt Disney Co (NYSE:DIS) in Y 1993. Last year, Colony and Qatar Investment sold Miramax to Qatar-based BeIN Media Group for about 3.5X its purchase price.

The Weinstein Co handed control of hundreds of films to Goldman Sachs Group Inc (NYSE:GS) and insurance company Assured Guaranty Ltd (NYSE:AOG) when it overhauled its balance sheet to avoid bankruptcy in Y 2010, while retaining ownership of 150 films, Reuters reported at the time.

Goldman Sachs later offloaded its control of the library to AMC Networks (OTCMKT:AMCX), which still owns a stake in the library, a source familiar with the matter said Monday.

Colony Capital and The Weinstein Co made no mention in their statement Monday of a possible deal value.

However, there are a couple of deal structures under consideration, they are as follows:

  1. Colony’s outright acquisition of all of The Weinstein Co or its major assets, including what it sees as the more attractive TV operations, with an escrow account being negotiated to cover legal liabilities.
  2. The Weinstein Co files for bankruptcy with Colony as a “stalking horse” bidder to buy it or its major assets. That would shield Colony from having to assume The Weinstein Co’s legal liabilities.

The cash infusion comes after many of the Weinstein Co’s partners have cut ties in recent days.

Goldman Sachs said on Friday it was exploring options for its stake in the company, which is worth less than $1-M.

Colony Capital is the private equity arm of Colony NorthStar Inc (NYSE:CLNS), a real estate investment trust that has holdings in healthcare, industrial and hospitality sectors.

Symbol Last Trade Date Change Open High Low Volume
NYSE:CLNS 12.54 16 October 2017 0.03 12.59 12.66 12.51 1,865,200
HeffX-LTN Analysis for CLNS: Overall Short Intermediate Long
Neutral (-0.22) Bearish (-0.40) Bearish (-0.27) Neutral (0.00)

Stat tuned.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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