The company said it received a cash deposit of $150 million on Monday from Sony, along with private equity companies Providence Equity Partners Inc., Texas Pacific Group and DLJ Merchant Banking Partners.
MGM said its management will recommend the deal, which it called a "proposed merger" to its board by Sept. 27.
Sony has agreed to pay $12 per share for MGM, 45 cents more than MGM's closing price of $11.55 Monday on the New York Stock Exchange. The deal also calls for Sony to assume about $1.9 billion in MGM debt.
The sale would mark the third time billionaire investor Kirk Kerkorian has sold the film studio, once best known for its musical hits like "Singing in the Rain" and "Meet Me in St. Louis." Kerkorian, through his Tracinda Group, owns 74 percent of MGM's outstanding shares. The sale to Sony would net him about $2.1 billion.
Sony is expected to shutter MGM's current production, with the possible exception of the "James Bond" franchise. MGM also produces films under the United Artists label.
But MGM has a considerable library of more than 4,100 titles, including the "Pink Panther" and "Rocky" franchises. Analysts have estimated MGM's library will generate $440 million in cash flow in 2004 by exploiting only 1,500, or about 36 percent, of its titles on the newer DVD format.