Washington Redskins owner Jack Kent Cooke plans to offer $1.05 billion in cash for Multimedia Inc., the South Carolina communications company that produces and syndicates "The Phil Donahue Show."
Multimedia, which owns 43 newspapers, five television stations and 10 radio stations and operates more than 100 cable television systems, replied that it has no interest in a sale. The company recently turned aside two other bids and announced its own plan to buy out public shareholders.
Cooke, who disclosed yesterday that he and his affiliates own more than 9.7 percent of Multimedia common stock, said that he met earlier this week with Multimedia officers and directors to discuss his interest in acquiring the company.
In addition to the Redskins, Cooke owns the Chrysler Building and the Kent Building in Manhattan; downtown Phoenix real estate known as Kent Plaza; Elmendorf Farm Inc., the Lexington, Ky., racing stable and breeding farm; Video Tape Enterprises, which provides remote video services from special events such as the Olympics, and extensive Virginia real estate. He also is chairman of Group W Cable, which has interests in cable television, a Cooke assistant said yesterday.
Cooke, reached at his office, declined to discuss his offer.
Cooke is the second owner of a professional sports team to launch an unsolicited bid this month for a major media company. Last week Atlanta broadcaster Ted Turner, who also owns the Atlanta Braves and Atlanta Hawks, launched a $3 billion hostile bid for CBS Inc.
Cooke is the third party to express interest in acquiring Multimedia. Only days after published reports that former Treasury Secretary William Simon had met with Turner to discuss a joint takeover bid for CBS, Simon reportedly offered about $1 billion for Multimedia. Neither Simon nor the company publicly confirmed that he made the bid, but sources yesterday said that he did.
Multimedia acknowledged on April 10 that it received a surprise $1.02 billion, $61-a-share buyout offer from Lorimar Productions, the California-based producer of movies and television programs which has profited recently from syndication sales of "Dallas." Multimedia said at the time that "no one should assume that any transaction will occur with" Lorimar or any other bidder.
Multimedia said Cooke wants to pay $63 a share in cash for all of the company's outstanding common stock, but has not said how he would finance the bid or what conditions he would seek. Multimedia stock closed at 56 7/8, down 1/2 in over-the-counter trading yesterday. The company had $304.4 million in revenue and $33.6 million ($2.02 a share) in net income last year.
In order for Cooke to succeed with his takeover bid, he needs the support of the Peace, Jolley, Furman and Sisk families, who control more than 40 percent of Multimedia's common stock and are described as the company's founding families.
"Because South Carolina law requires that mergers be approved by holders of at least two-thirds of the company's outstanding shares, no one should assume that any transaction will result with Mr. Cooke," Multimedia said yesterday.
Multimedia said that representatives of the founding families have informed Cooke that they remain committed to the previously announced recapitalization plan that they and certain members of management have approved. Multimedia also said that the families had entered into an agreement to support the previously announced plan and "not to sell or dispose of their stock or otherwise support the Lorimar or Cooke proposals."
Under terms of the previously approved buyout plan, each Multimedia share will be exchanged for $41.25 in cash and $26.54 face amount of 16 percent subordinated discount debentures. Shareholders also have the option to retain an equity stake -- stock -- in the newly structured Multimedia, equal to about 80 percent of their current equity stake. Stockholders electing to receive the equity will receive 80 percent of their current equity, plus the debentures and $36 cash, rather than $41.25.
Multimedia said yesterday that it had been informed that the company's founding families will be amending their filings with the Securities and Exchange Commission to "reflect the fact that they are reserving their rights to purchase additional Multimedia shares in the open market or otherwise if purchases become necessary to facilitate the recapitalization plan."
Multimedia also said that certain South Carolina shareholders who were instrumental in founding the company have joined the four families' stockholder group, increasing the group's holdings beyond the 42 percent held by the families and management.
Cooke, who now lives in Virginia, was born in Ontario, Canada, on Oct. 25, 1912. He made a fortune years ago in Canadian broadcasting and publishing ventures with Lord Roy Thomson. He is the former owner of The Los Angeles Lakers and The L. A. Forum, which he built.