Metro-Goldwyn-Mayer (MGM) has announced that it has reached an agreement in principle with a group led by Japan's Sony Corporation to acquire the Hollywood studio for nearly $5 billion, Xinhua reports.

Meanwhile, US entertainment giant Time Warner Inc. said Monday it has withdrawn its bid to buy the MGM studio after they failed to agree on a price.

"As we pledged to our shareholders, we approach every potential acquisition with strict financial discipline," Time Warner chairman and chief executive Dick Parson said.

"Unfortunately, Time Warner could not reach agreement with MGM at a price that would have represented a prudent use of our growing financial capacity."

The decision left Sony as the sole remaining bidder for MGM's lucrative film library, which has more than 4,000 titles including "The Wizard of Oz," the "James Bond" and the "Pink Panther" series. Time Warner has never revealed its bid price for MGM, although earlier reports said MGM is worth as high as $5 billion.

Time Warner reportedly offered about $3 billion in cash and stock for MGM plus the assumption of $2 billion in debt, according to reports published by the New York Times and The Wall Street Journal.