Multimedia draws $1.5 billion offer p.17

By: George Garneau AT LEAST TWO bids have been made for Multimedia Inc., the Greenville, S.C.-based owner of newspapers, TV stations and syndicated TV programs.
The New York Times and Wall Street Journal reported the offers June 13, but the companies involved are not commenting, including Multimedia, which put itself in play in February when it hired the investment bank Goldman Sachs to "explore strategic alternatives" to its stagnant stock price.
The reports said one bid came from a coalition of NBC, Media General Inc., and Tele-Communications Inc. The Times said NBC wants the TV stations, including outlets in Cleveland, St. Louis, Cincinnati and Knoxville, and the syndicated shows "Donahue," "Sally Jessy Raphael," "Jerry Springer" and "Rush Limbaugh."
Media General wants Multimedia's 11 daily and 49 nondaily newspapers, led by the flagship Greenville News-Piedmont. And TCI wants the cable systems and their 430,000 subscribers.
Another bid ? $1.5 billion ? was reported to be proffered by the Atlanta-based broadcast company Ellis Communications and the New York-based investment firm Kelso & Co., the Journal reported, attributing sources familiar with the situation.
Talk of offers sent Multimedia's stock more than 8% higher to $41.94 a share June 12. The stock fluctuated between $34 and $39 a share in fourth-quarter 1993 and a year later slipped to between $26 and $30.
Also said to be in the bidding are Gannett Co., the nation's biggest newspaper publisher, and King World Productions, a TV production company.
The Journal said Multimedia could bring over $2 billion if sold separately, but some shareholders want to keep it whole, to avoid taxes, which the Ellis-Kelso offer would do.
Ellis, founded by longtime broadcast executive Bert Ellis in 1993, owns 12 TV stations.
Analysts valued Multimedia's TV stations as the most coveted unit, worth about $750 million. The entertainment division has faced increasing competition from new talk shows, and its longtime star, Donahue, has given notice that after a quarter century, he can't go on forever. The newspaper division already produces a hefty operating profit margin of 33%, and is considered a mature business. And small cable systems of Multimedia's size are being gobbled up in an industry consolidation.
Multimedia reported net profit of $90 million last year on revenues of $630.5 million. Each of the four major divisions contributed about one-quarter of total revenues.
Multimedia set a June 21 deadline for bidders to submit their offers.