In a letter sent to MGM on Monday, Lionsgate said its proposed merger with the studio would amount to $100 million in annual savings while boosting cash flow by $120 million over five years. Documents were also filed with the SEC. Among the details of the proposed merger: The new company would lead to a reduction in staff of about 175 people, or 17% of the combined workforce of the two companies. And a merger between MGM and Lionsgate would lead to the production of 16 movies per year. MGM’s board faces a Friday deadline to vote on a proposed prepackaged bankruptcy plan in which Spyglass Entertainment’s Gary Barber and Roger Birnbaum would be put in charge. Under that scenario, creditors would own 95% of the studio’s equity. The Lionsgate proposal gives MGM creditors 55% of the equity. Last week, Carl Icahn, who supports the Lionsgate plan, offered to buy another $963 million of MGM’s debt.
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