Time Warner Inc, Lions Gate Entertainment Corp and billionaire Len Blavatnik's Access Industries put up rival bids of $1.2 billion to $1.5 billion for studio Metro-Goldwyn-Mayer.
Time Warner put in the highest bid of the three, sources said. The company has been seen as most likely to walk away with MGM and its library of mostly classics, such as the James Bond franchise.
The offers were far less than MGM first expected. MGM, which is struggling with $3.7 billion in debt, had initially hoped for bids of at least $2 billion.
The studio said in a statement yesterday it "received a number of bids" which it will review over the next "several weeks."
The Friday deadline for a second round of bids for MGM was unofficially extended after Time Warner did not immediately put in a bid, the sources said.
MGM also said it expects to work with lenders to extend the forbearance period on its bank debt, which ends March 31, and that it "expects to seek a forbearance agreement for its revolving line of credit, for which a payment is due April 8."
Independent studio Lions Gate, industrial holding company Access and Time Warner declined comment. The sources spoke on condition of anonymity because details of the auction have not yet been made public.
MGM studio said in November it was exploring a potential sale of the company.
A committee of MGM's creditors is expected to meet today and will assess the company's situation, sources said.
