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March 26, 2010 by · 1 Comment 

Lions Gate Entertainment, the parent company of the Lionsgate film studio, has reportedly dropped out of the bidding for MGM, the Wall Street Journal reported today (Friday), citing people close to Lions Gate. The newspaper said that the company had bid around $1.3-$1.4 billion for the studio, a bid that was rejected by MGM’s owners as too low. Lions Gate then decided not to submit a new bid, the Journal said. The offer — and its rejection — coincided with efforts by activist investor Carl Icahn to put the kibosh on any move by Lions Gate executives to acquire either MGM or Miramax, whose principal value lies in their film libraries. Icahn had complained that those libraries have plunged in value as people have assembled large DVD collections and are reluctant to expand them. The Journal said that while the MGM library generated more than $460 million just two years ago, the figure declined to $280 million last year and is expected to fall to about $220 million in 2012.