One of MGM's best loved films is the Wizard of Oz

The Wall Street Journal and New York Times claim the world's biggest media group had joined Sony in the battle.

But the Time Warner offer is said to be slightly less than the reported $5bn offered by Sony, at $4.7bn.

A deal would give the victor access to MGM's film library, a key cash source as more movies are released on DVD.

Reports claim that Time Warner's offer is made up of cash and shares, while Sony's bid - which includes several private equity partners - is made up of cash and assumed debt.

Movies reunited

MGM is looking to recoup debts of $2bn incurred after it paid shareholders a dividend of $8 per share in May.

Experts claim that MGM's controlling shareholder Kirk Kerkorian may be more attracted to Time Warner's offer as it would see him take a stake in the global media giant.

Any deal with Time Warner would also see MGM's pre- and post-1948 movies reunited as Ted Turner's Turner Broadcasting - owned by the media giant - bought up the rights to MGM's pre-1948 films.

All parties involved in the bidding talks have declined to comment.

However, Time Warner is said to be in preliminary talks while Sony's discussions are thought to be at an advanced stage. But reports claim Time Warner has said it believes Sony's offer is too high.

Suitor in wings?

MGM closed 5% higher at $12.66 on the reports, while Time Warner dipped 17 cents to $17.41 and Sony edged up 21 cents to $38.26.

Meanwhile another bidder could be waiting in the wings.

NBC-Universal may be poised to join the takeover battle, with the group reportedly signing a non-disclosure agreement in order to gain access to the studio's books.

But Wall Street observers claim that NBC owner General Electric may find another acquisition tough to swallow after buying Universal Studio's assets from Vivendi earlier this year.

MGM - the last remaining Hollywood studio - was founded in 1924 after a merger between Metro Pictures Corporation, Goldwyn Pictures, and Louis B Mayer Productions.

Its film classics include Gone With The Wind, Ben Hur, The Wizard Of Oz and Doctor Zhivago, as well as many musicals.

The company's large movie library also includes the rights to James Bond films.