The Associated Press is reporting that film and television studio Metro-Goldwyn-Mayer Inc. has agreed to let itself be bought out by a consortium headed by Sony. The price will be $12 per share in addition to assumed debt.

With 235 million shares outstanding and approximately $2 billion dollars of debt, this deal carries a price tag of around $4.8 billion. The buyers have pledged $150 million as an initial downpayment. Joining Sony on the deal are Providence Equity Partners Inc., Texas Pacific Group and DLJ Merchant Banking Partners. MGM will recommend to its management that the deal be approved by its board before September 27th. The arrangement is being billed as a “proposed merger.”

Time Warner was also in line to buy MGM but decided to back out when Sony raised its offer. Sony plans to scrap MGM production but the MGM library of movies is expected to generate ongoing revenue for the company as many old movies are released in new DVD formats.