Billionaire Burkle Said in Deal to Buy Relativity Media Stake From Elliott
Billionaire Ron Burkle agreed to buy Elliott Management Corp.’s minority stake in Relativity Media LLC, the independent film studio run by Ryan Kavanaugh, according to two people with knowledge of the situation.
The sale price is in the hundreds of millions of dollars, said one person, who declined to be identified because the deal hasn’t been announced. Elliott, a New York-based hedge fund, will continue to hold a small stake, said one of the people.
The accord ends a fraying partnership with Elliott that allowed Kavanaugh, Relativity’s 37-year-old chief executive officer, to build the Los Angeles-based film studio. Elliott said on Jan. 4 that Michael Joe, who oversaw the Relativity stake, was leaving as the fund reduces its movie focus.
Kavanaugh has been seeking a buyer for Elliott’s stake since last year, as well as additional financing.
Last year, JPMorgan Chase & Co. (JPM) led a group considering a $700 million deal for Elliott’s stake in Relativity, the website TheWrap reported in May.
If completed, the Relativity purchase would become Burkle’s second entertainment investment in 2012. Y Entertainment Group, part of his Yucaipa Cos., acquired Artist Group International, according to a statement yesterday. The New York-based group books concerts for Billy Joel, Rod Stewart and Metallica. The terms weren’t disclosed.
Burkle, 59, invested $200 million in Relativity in November to help release the film “Immortals,” TheWrap said. He backed an unsuccessful bid in 2010 by Harvey and Bob Weinstein to buy the Miramax studio back from Walt Disney Co.
Peter Truell, a spokesman for Elliott Management, the New York-based hedge fund, had no immediate comment. A Relativity spokesman declined to comment.
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