A group led by The Giant Group Ltd., a cement manufacturer based in Harleyville, S.C., said it has acquired a 9.8 percent stake, or about 2.7 million class A common shares, in Media General Inc. and that it may try to acquire control of the company.
In a document filed with the Securities and Exchange Commission, the group said it purchased the stake for $108.3 million. Barris Industries Inc., a TV-game show producer in which Giant owns about a 22 percent stake, bought the bulk of the stock -- 1.3 million class A common shares -- between Oct. 13 and 16 at prices ranging from $42.50 to $45.50 a share.
Barris now holds 1.8 million shares, or a 6.6 percent stake, which it bought for about $74.13 million. Beverly Hills, Calif.-based Barris produces the popular TV game shows "The Newlywed Game," "The Dating Game" and "The Gong Show."
Based in Richmond, Media General is a newspaper, broadcast, cable TV and newsprint company. The company issued a statement yesterday saying the company intends to maintain its independence.
Media General said that Chairman D. Tennant Bryan and Vice Chairman J. Stewart Bryan are puzzled by how Giant Group can expect to control Media General since the D. Tennant Bryan Media Trust controls more than two-thirds of the company's Class B stock and therefore elects 70 percent of the board. The two executives are the sole trustees of the trust.
The investor group said it may seek control of Media General through an exchange offer, a tender offer or a merger by recapitalizing, restructuring or changing Media General's corporate charter.
The group also said it has held discussions with third parties concerning the possibility of joint business deals, but did not name the parties involved.
In the filing, the group said that its members may buy additional class A and class B common shares or both on the open market, and that they may seek one or more directorships in the company through a proxy contest.
Under Media General's charter, holders of class A common stock are entitled to elect one-third of the board of directors and are also entitled to vote on the reservation of shares for stock options and certain major corporate reorganizations or acquisitions. Both class A and B common stock receive the same dividends per share, according to the company's 1986 annual report.
Other members of the investor group include KCC Delaware Corp., a wholly owned subsidiary of Giant based in Wilmington, Del.; Sugarman, Giant's controlling shareholder, board chairman and president; David Gotterer, Giant vice chairman, and William A. Schickler III, senior vice president and chief financial officer of Barris.
KCC owns 739,800 shares or a 2.7 percent stake in Media General, the voting power of which it shares with Giant.
Sugarman owns 130,000 common shares, or half a percent, of Media General's outstanding common shares, while Gotterer and Schickler own 5,000 and 2,000 shares respectively, or less than 1 percent each.
Media General's wholly owned newspapers include The News Leader and Sunday Times-Dispatch in Richmond, The Tampa Tribune, The Journal in Winston-Salem, N.C., and 33 weekly community newspapers in the Orange County area of Southern California. The company also holds a 40 percent interest in a group of 18 medium-sized dailies and eight weeklies.
The company's broadcast division operates two TV cable networks in Northern Virginia, three TV stations in Tampa and Jacksonville, Fla., and Charleston, S.C., and a diversified media placement service based in New York and Memphis, Tenn.
Media General's newsprint division is the third-largest in the United States, manufacturing more than 650,000 tons of newsprint annually through wholly owned plants in New Jersey and California and through jointly owned mills in Illinois and Georgia. The company also operates a jointly owned mill in Mexico, according to the filing.