Lorimar Bids $1.02 Billion for Multimedia

Lorimar, a fast-growing Culver City-based entertainment and advertising company known for its hit television series “Dallas,” Wednesday offered to acquire Multimedia, a broadcaster and newspaper publisher, for $1.02 billion, or $61 a share.

Lorimar’s all-cash offer tops a sweetened cash-and-debenture bid of $890 million, or $53.25 a share, from a Multimedia management-led investor group that earlier this week was approved by Multimedia’s board. If the offer is accepted, Multimedia would be merged into a wholly owned Lorimar subsidiary, the company said. The acquisition would mark Lorimar’s first ownership of TV and radio stations.

Multimedia officials weren’t immediately available for comment late Wednesday.

The bid is the latest in a series of actual or rumored mergers in the broadcast industry. Last month, Capital Cities Communications agreed to acquire American Broadcasting Cos., and takeover talk has swirled around CBS for more than a month, although no offers have surfaced.

Lorimar said its offer is subject only to the completion of financing arrangements. Drexel Burnham Lambert, Lorimar’s investment banker, has agreed to help raise money for the transaction, Lorimar said.

Drexel Burnham specializes in so-called junk financing, or the use of high-yielding debt to finance risky transactions.

Lorimar’s offer could trigger a bidding contest for Multimedia, which has already spurned a $60-a-share offer from a group headed by former Treasury Secretary William E. Simon. The Simon group’s offer was conditioned on the company’s agreement to shed its newspaper operations.

In addition to publishing 13 daily and 30 non-daily newspapers, Greenville, S.C.-based Multimedia owns and operates five television stations and 12 radio stations and operates more than 100 cable-television franchises in four states.

Like Lorimar, Multimedia is a syndicator of television programming, including “The Phil Donahue Show.” In the year ended Dec. 31, 1984, Multimedia had profits of $33.69 million on revenue of $304.36 million. The company has about 16.66 million shares outstanding, which trade over-the-counter in the National Market System. The shares closed Wednesday at $54, off 12.5 cents.

In addition to “Dallas,” Lorimar produces other programs for the TV networks, including “Knot’s Landing” and “Falcon Crest.” The company also syndicates reruns of “Dallas,” “Eight is Enough” and “Laugh In.” In the year ended July 31, 1984, Lorimar reported profits of $11.7 million on revenue of $260 million. It has 7.6 million shares outstanding, which trade on the American Stock Exchange. The shares closed Wednesday at $36.75, off 37.5 cents. Lorimar’s offer was announced after the market had closed.

The Lorimar bid will likely complicate Multimedia management’s bid to take the company private. The management bid has already been boosted once to help settle four class-action suits filed by shareholders who challenged the fairness of management’s original offer.

Thus, Lorimar’s $61-a-share cash offer could force Multimedia’s board to open up the bidding.

Lorimar, which said it has been actively seeking expansion opportunities, said “the strategic objectives of both companies will be well served by the proposed merger.” Company officials weren’t available to elaborate.

With three popular serials, Lorimar was in the enviable position of having three of the 10 top-rated television programs during the 1983-84 season; that performance has continued during much of the current season.

Lorimar’s theatrical films, on the other hand, have generally fared poorly at the box office.

The company also owns Kenyon & Eckhardt, the world’s 26th-largest advertising agency.