Motown Was Contacted on Warner Unit : Firm Was Asked if It’s Interested in Record Division

Jay Lasker, president and chief operating officer of Motown Record Corp., said Wednesday that his company has been approached to determine if it is interested in buying the recorded-music division of Warner Communications.

“I’ve been approached . . . within the last week,” Lasker said in response to a reporter’s question, adding: “We are interested in buying . . . the whole record division.”

Lasker declined to say who approached Motown, however, and said that no round of discussions is scheduled at present.

At Warner headquarters in Midtown Manhattan, Warner Vice President Geoffrey W. Holmes declined comment on the possibility of any such sale. Holmes also declined to comment on published reports that negotiations are under way to sell Warner’s 50% owned cable-TV company.

Sold to Offset Losses

Warner has already sold most of its non-entertainment businesses to offset nearly $1 billion in losses from by its former Atari video-game and home-computer unit in 1983 and 1984.

But the recorded-music division is one of Warner’s core businesses, and industry sources said they would be surprised by its sale unless it commands a hefty premium and is part of a larger scheme to sell the company or take it private.

As reported, sources have said that Warner Chairman Steven J. Ross is searching for a way to regain control of the company he founded 24 years ago. Ross, who owns less than 1% of Warner’s outstanding shares, accepted Chris-Craft Industries as a “friendly” investor last year to fight off a takeover threat posed by Australian publisher Rupert Murdoch.

Since then, Chris-Craft has raised its stake to 28.7% but indicated to some sources that it would be willing to sell if all shareholders benefit equally.

May Raise $2 Billion

Wall Street sources have estimated that more than $2 billion would be required to buy out all Warner shareholders. By one analyst’s estimate, Warner could raise $375 million from its share of a sale of its cable-television holdings and could expect its core businesses to generate $265 million in 1985 pretax earnings.

The analyst, who asked not to be identified, subtracts about $95 million in pretax earnings to cover the company’s overhead and existing interest payments, and he estimates that Warner will have about $170 million available this year to service any new debt assumed in a leveraged buy-out. That would leave a Ross-led group “short a little bit,” he said, musing that if Ross is not willing to bring in another “white knight” investor, “they might feel more comfortable if they sold the record division, too.”

Ross reportedly has retained the investment banking firm of Drexel Burnham Lambert to devise a leveraged buy-out plan while Warner continues to employ the investment firm of Lazard Freres to handle its “asset redeployment” plan.

Efforts to reach Chris-Craft Chairman Herbert J. Siegel for comment during the past week have been unsuccessful.

Motown, a privately held company, turned over distribution of its records to MCA in 1983 for an undisclosed number of years. As a result, the Los Angeles-based company might be able to acquire another record company without running afoul of the antitrust concerns raised by the Federal Trade Commission last year when that agency blocked Warner’s effort to acquire 80% of Polygram Records’ operations in the United States.

The FTC argued that the Warner-Polygram merger might establish “the largest recorded-music distributor in the United States and the world, controlling 26% of the U.S. market.”