We all recognise MGM needs to be part of a larger organisation

Alex Yemenidjian MGM Chairman

The film-maker with its instantly recognisable roaring lion logo, is reported to have hired investment bank Goldman Sachs to help it find a buyer willing to pay about $7bn (�4.85bn; 7.85bn euros) for the studio.

The news boosted MGM shares by more than 12% on Tuesday, valuing the company at about $5.5bn.

The company refused to confirm or deny the stories, saying only that it was "regularly evaluating business combination opportunities" and adding that "there can be no assurance that the company will decide to enter into any transaction".

Appetite for growth

Still, MGM's desire to get bigger is no secret in the movie business, as a conference call at the time of last October's results made clear.

"We all recognise MGM needs to be part of a larger organisation," chairman Alex Yemenidjian told analysts and investors.

Talks in the recent past have taken place with the Disney group, whose own lacklustre performance in the past couple of years has set tongues wagging about its own prospects as a merger partner.

MGM's own financial performance is relatively healthy for an industry in the depths of a recession.

Setting aside one-off charges, the July-September quarter showed a $28m profit on sales of nearly $400m.

Possible suitors include French-American media giant Vivendi, Germany's Bertelsmann which might use it as a way into the movie business, NBC's owner General Electric, Viacom or USA Networks.

Sale or return

Home to films including the James Bond series, many of Woody Allen's comedies, and classics such as Some Like It Hot and Ben Hur, MGM is no stranger to the auction block.

Its current owner is Kirk Kerkorian, an 84-year-old billionaire embroiled in a messy case over whether his divorced wife is permitted to claim $320,000 a month in child support for their daughter.

He bought MGM, sold it and bought it again repeatedly over the three decades since he first took over the studio in 1969.

In 1982, shortly after adding United Artists to its stable, he spun off 15% of the home entertainment arm.

Then, in 1986, Mr Kerkorian sold the whole company for $1.5bn to CNN founder Ted Turner, who had shortly before failed in a bid to buy CBS.

He then bought most of it back as its debts mounted, only to sell it again in 1990 to Pathe Communications - and again, this time after the new owner defaulted and with Credit Lyonnais holding title for four years, reacquired MGM in 1996.