Multimedia Inc. continued to give outsiders the cold shoulder, saying Thursday it rejected a sweetened takeover proposal of more than $1.08 billion from sports and business tycoon Jack Kent Cooke.
In rejecting Cooke`s second unsolicited proposal, and the fourth such unwelcome bid for the company, Multimedia said it was continuing to pursue an $890 million recapitalization plan proposed by an insider group. The insider group is made up of the company`s four founding families and senior management, and the group controls about 44 percent of the company`s stock.
”We have made it as clear as possible that the founding families and management want to proceed with the recapitalization plan and that we don`t want to entertain (Cooke`s) offer,” said Walter E. Bartlett, Multimedia president, chief executive officer and a member of the insider group, in a telephone interview.
Cooke`s holdings range from the Washington Redskins football team to the Chrysler Building in New York City. He and his associates own 9.7 percent of Multimedia, a newspaper, broadcasting and entertainment firm based in Greenville, S.C.
On May 10, Cooke said he had sent a letter to the Multimedia board proposing to acquire the company`s 16.7 million shares outstanding for ”more than $65 a share,” or more than $1.08 billion.
The Multimedia board rejected Cooke`s previous proposal of $63 a share. Earlier this year, it turned down unsolicited proposals of $61 a share from Lorimar Inc. and of $60 a share from Wesray Corp., controlled by former Treasury Secretary William E. Simon.
The insider group plans to offer Multimedia shareholders a package of cash and debt, which can include stock in the recapitalized company in exchange for a lesser amount of cash. The group has said the package has a market value from $52.46 to more than $54 a share. Some analysts believe the stock being offered to shareholders by the insiders could have a market value that would narrow the gap with the Cooke offer.
Bartlett said one of the previous takeover proposals would have allowed the founding families to retain an equity interest in the acquired company. No such offer was made to the families by Cooke. However, Bartlett said, ”Cooke made it clear that he wanted management to stay on and run the company.”
He said the insider group will present its plan to shareholders at a meeting expected to be held this summer. A two-thirds vote of shareholders is needed to approve any acquisition of the company. The insiders` 44 percent stake is enough to block any takeover offer they consider hostile.
The insiders have been trying to extend their control to at least 50 percent of the stock. That holding would block any raider from trying to gain control of the Multimedia board through a proxy fight.
The Multimedia board previously authorized the company to secure a $300 million line of credit that could be used for stock repurchases. Bartlett said the board has not yet decided whether to proceed with any buyback program.
