Television producer Burt Sugarman made a $1.75 billion takeover bid for Richmond-based Media General Inc. yesterday, a move that officials of the newspaper and television conglomerate described as perplexing and that analysts called a long shot.
Sugarman, a Hollywood veteran who recently bought Barris Industries Inc., the firm that produced "The Gong Show," "The Dating Game" and "The Newlywed Game," offered $61.50 a share for both classes of Media General stock.
Media General's class A stock, the only one that trades publicly, closed yesterday at $46.25, up $2.37 1/2. Sugarman also threatened a proxy fight to oust Media General's board if the company does not accept his offer.
"It's a private fiefdom," Sugarman said of Media General, whose holdings include the Richmond Times-Dispatch and News Leader; cable systems, including one that serves Fairfax County; a number of other daily newspapers; 32 weekly papers in Southern California; three television stations, and a 40 percent interest in Garden State Newspapers Inc.
Media General Chairman D. Tennant Bryan, whose family controls the company, said yesterday that the Bryans had no interest in selling.
Bryan made a similar statement nine months ago, when Sugarman bought a 10 percent stake in Media General for $100 million.
"Our intentions and purposes remain the same and our resolve is firm," Bryan and his son, Vice Chairman J. Stewart Bryan, said in a statement. "Our interests in Media General are not for sale for any price."
The Bryans own 70 percent of Media General's untraded class B shares. According to company bylaws, that gives the family veto power over any prospective merger and the rights to elect a majority of Media General's board -- making a proxy fight all but impossible, analysts said. The Bryans also own 11.5 percent of the company's publicly-traded class A stock.
"It makes no sense. I can't possibly think what Sugarman thinks he can gain by this," said John Morton, an analyst at Lynch, Jones & Ryan in Washington.
"I'd say that his chances of succeeding are nil," said George F. Shipp, an analyst with Investment Corp. of Virginia in Richmond.
But in an interview yesterday, Sugarman said that if the Bryans refuse to sell, he will begin a proxy contest for the three seats on the nine-member Media General board elected by class A shareholders.
"We're not through," he said. "If this isn't enough, we'll move on to other means. We're not going away.
"I made the offer this morning and the Bryans had rejected it 35 minutes later. They didn't even go to their board," Sugarman said. "You'd think that they would at least do that with a $1.75 billion offer. I'm sure there are some shareholders out there who are upset about that."