Multimedia Rejects Jack Kent Cooke Offer

Jack Kent Cooke, owner of the Washington Redskins football team, said Friday that he wants to buy Multimedia Inc. for $1.05 billion but was rebuffed by executives of the newspaper and broadcast concern, who said they were not interested.

Multimedia said it will continue with a previously announced, $890-million management buy-out plan.

Cooke, a Virginia businessman and former owner of the Los Angeles Forum and Lakers basketball and Kings hockey teams, said he was offering $63 in cash for each of the 16.7 million shares of Multimedia’s outstanding common stock.

The offer was the third outside bid for Multimedia following the announcement in February by senior management and members of the company’s founding families that they planned to buy up common stock and recapitalize the company.

Multimedia also received offers from Wesray Inc., an investor group headed by former Treasury Secretary William E. Simon, and from Culver City-based Lorimar Productions.

Wesray offered $60 a share, and Lorimar bid $61. Multimedia stock closed Friday at $56.875 a share in the over-the-counter market.

Multimedia publishes 14 daily and 29 non-daily newspapers, owns five television and 10 radio stations, operates more than 100 cable-television franchises in four states and produces and syndicates television programming, including “The Phil Donahue Show.”

Cooke said in a statement from his office in Middleburg, Va., that he and his affiliates own 9.7% of Multimedia common stock.

“Earlier this week, Mr. Cooke met with several of Multimedia’s officers and directors and discussed his company’s interest in acquiring Multimedia Inc.,” the statement said.

Cooke said he had no further comment on the proposal.

Responding to the announcement, Multimedia issued a statement saying management would not support the bid.

“In making the proposal, Mr. Cooke did not describe his sources of financing or the conditions he would seek,” it said.

Donald Barhyte, Multimedia’s chief financial officer, said Cooke’s proposal was presented to family shareholders. “They have said they would prefer not to sell the company,” he said.

Under the recapitalization plan produced by the founders and senior management, each shareholder would receive $41.25 in cash and $26.54 principal-amount bonds paying 16% interest.

However, shareholders also are being given the option of retaining an equity interest in the newly structured company equal to 80% of their stock holdings. That option can be taken in lieu of about $5.25 of the cash being offered for each outstanding common share.

Multimedia said the founders--members of the Peace, Jolley, Sisk and Furman families--had agreed to support the recapitalization plan and “not sell or dispose of their stock or otherwise support the Lorimar or Cooke proposals.”

Barhyte said the interest in Multimedia might stem from the company’s recent success and other purchase activity of major media companies. He also said the recapitalization plan to solidify the ownership might have “drawn attention” to Multimedia.

The release also said that prominent shareholders might align themselves with the founding families and senior management in the recapitalization effort.

The company said in its statement that its board had authorized the company to obtain a line of credit of up to $300 million to be used for share repurchases if the board of directors determined that repurchases of shares would be needed.