Multimedia Officials Say Cooke Offer Won’t Be Accepted
GREENVILLE, S.C. (AP) _ The owner of the Washington Redskins football team said Friday he wants to buy Multimedia Inc. for $1.05 billion, but executives of the newspaper and broadcast concern said they were not interested.
Multimedia said it would continue with an $890 million management buyout plan.
Jack Kent Cooke, a Virginia businessman, said he was offering $63 in cash for each of the 16.7 million shares of Multimedia common stock outstanding.
The offer was the third outside bid for Multimedia following the announcement by senior management and members of the founding families that they planned to buy up common stock and recapitalize the company.
Multimedia also received offers from Wesray Inc., an investor group, which is headed by former Treasury Secretary William Simon, and from Lorimar Productions of California.
Wesray offered $60 a share and Lorimar bid $61. Multimedia stock closed at $56.871/2 a share Friday in the over-the-counter market.
Multimedia is a media communications company that publishes 14 daily, and 29 non-daily newspapers, owns five television and 10 radio stations, operates more than 100 cable television franchises in four states, and produces and syndicates television programming, including the ″Phil Donahue Show.″
Cooke said in a statement from his office in Middleburg, Va., that he and his affiliates own 9.7 percent of Multimedia common stock.
″Earlier this week, Mr. Cooke met with several of Multimedia’s officers and directors and discussed his company’s interest in acquiring Multimedia Inc.,″ the statement said.
Cooke said he had no further comment on the proposal.
Responding to the announcement, Multimedia issued a statement saying management would not support the bid.
″In making the proposal, Mr. Cooke did not describe his sources of financing or the conditions he would seek,″ it said.
Donald Barhyte, Multimedia’s chief financial officer, said Cooke’s proposal was presented to family shareholders.
″They have said they would prefer not to sell the company,″ he said.
Under the recapitalization plan produced by the founding families and senior management, each shareholder wound receive $41.25 in cash and $26.54 in principal amount of bonds paying 16 percent interest.
However, shareholders also are being given the option of retaining an equity interest in the newly structured company equal to 80 percent of their stock holdings. That option can be taken in lieu of approximately $5.25 of the cash being offered for each outstanding common share.
The recapitalization offer was made in February by senior officials and members of the Peace, Jolley, Sisk and Furman families, which founded Multimedia.
Multimedia said the founding families had agreed to support the recapitalization plan and ″not sell or dispose of their stock or otherwise support the Lorimar or Cooke proposals.″
Barhyte said the interest in Multimedia might stem from the company’s recent success and other purchase activity of major media companies. He also said the recapitalization plan to solidify the ownership might have ″drawn attention″ to Multimedia.
The release also said that prominent shareholders might align themselves with the founding families and senior management in the recapitalization effort.
The company said in its statement that its board had authorized the company to obtain a line of credit of up to $300 million to be used for share repurchases if the board of directors determined that repurchases of shares would be needed.
Because state law requires that mergers of South Carolina-based companies be approved by holders of at least two-thirds of the outstanding stock, Multimedia said no one should assume that any transactions would result with Cooke.