Time Warner drops out of race to buy MGM

Time Warner Inc. said Monday it had withdrawn its bid for movie studio Metro-Goldwyn-Mayer because it could not agree on a price.

The decision leaves Sony Corp. as the sole remaining bidder for MGM’s lucrative film library and its movie studio, although no sale is certain.

MGM declined to comment on Time Warner’s statement.

Time Warner has never revealed how much its offer was worth. A source familiar with the talks between Time Warner and MGM, who spoke on condition of anonymity, on Monday confirmed earlier reports that put Time Warner’s bid near $2.6 billion in cash, along with the assumption of about $2 billion in MGM debt.

A source familiar with the talks between Sony and MGM, who also spoke on condition of anonymity, said Sony had increased its bid over the weekend to $3 billion in cash and the assumption of about $2 billion in debt.

Energy

Hurricane Ivan begins to rock oil markets

Oil prices shot up more than $1 a barrel Monday as traders focused on the changing path of Hurricane Ivan, which prompted several large oil and natural gas producers to evacuate rigs in the Gulf of Mexico.

“It’s all fear, it’s all speculative buying,” said Agbeli Ameko, managing partner at the Denver-based energy research firm Enercast.com, adding that the actual loss of supply, at least for now, was negligible.

Light sweet crude for October delivery rose $1.06 to settle at $43.87 per barrel on the New York Mercantile Exchange as Ivan pummeled the Cayman Islands, then strengthened to a Category 5 storm, with maximum sustained winds of 160 mph, as it headed for western Cuba.

As a precautionary measure, Shell Oil Co. announced that 750 workers would be evacuated from the Gulf of Mexico and that approximately 272,000 barrels of oil would be shut-in or cut off.

ChevronTexaco Corp. and Newfield Exploration Co. also have ceased some production. Other companies, including BP PLC, Anadarko Petroleum Corp. and Kerr-McGee Corp., have evacuated employees, analysts said, but have not announced that any production would be shut-in.

Wall Street

Krispy Kreme auditors raise red flag over report

Shares of Krispy Kreme Doughnuts Inc. fell Monday after the company said an independent auditor refused to sign off on the firm’s second-quarter financial statement until an outside law firm hired by the company’s board performed additional work.

The North Carolina-based company said in a filing Friday with the Securities and Exchange Commission that the auditor, which it did not name, would not complete its review without the additional information. The company’s auditor is PricewaterhouseCoopers LLP.

The Krispy Kreme filing did not discuss the auditor’s request, saying only that it concerned “a specific matter relating to an acquisition in fiscal 2004.”

Shares of Krispy Kreme fell 42 cents to close at $11.56.