Media conglomerate Time Warner Inc. (TWX) is formalizing an offer to acquire film studio Metro-Goldwyn-Mayer Inc. (MGM) for a value approaching $5 billion in cash and stock, a source close to the negotiations said late on Wednesday.

Under the deal being considered, the parent of film studio Warner Brothers (search) would offer MGM controlling shareholder Kirk Kerkorian (search) about $11.50 a share in stock, and other MGM stockholders about $13 a share in cash, the source said.

Las Vegas billionaire Kerkorian owns roughly 74 percent of MGM's outstanding stock.

Sony Corp. (search), which has been negotiating to acquire MGM since late April for $5 billion, is still very much in the running, the source said.

Sony could still seal a deal quickly because it has already performed a great amount of due diligence.

However, as recently as six months ago, Time Warner was mulling an offer for MGM, the maker of James Bond movies, and could also move fast toward a deal.

An MGM spokeswoman declined to comment and a Time Warner spokesman could not immediately be reached.