Cooke Files Suit Against Multimedia : Board Won’t Reconsider His Offer to Buy Firm

Washington Redskins owner Jack Kent Cooke filed suit Thursday against Multimedia Inc. to “protect” his investment in the company and “the investments of thousands of Multimedia shareholders.”

In April, the company turned down Cooke’s $63-a-share, or $1.05-billion, offer. He then revised the amount to $65 a share and was rebuffed again.

“I am satisfied my ($65-a-share) offer is much more advantageous to the shareholders of Multimedia than any which has been made to date by management or by others,” Cooke said in a statement Thursday. He said the company’s shareholders “are being financially discriminated against by not being allowed to get a fair price for their Multimedia stock.”

Senior management and the company’s founding families--Peace, Jolley, Furman and Sisk--control about 43% of the company’s common stock.

Cooke has accused them of offering institutional investors, who control about 8% of the stock, the chance to buy shares “advantageously” in exchange for a recapitalization plan to ensure control of the company.

He filed his suit in state Circuit Court in Greenville, S.C., where Multimedia is based.

Multimedia Chief Financial Officer Donald Barhyte said he could not comment on the suit because Multimedia had not yet been served with the court papers.

In Greenville, the company announced Thursday that its board of directors would give no further consideration to the Cooke offer of $65 a share.

The company said that the board on Wednesday reaffirmed its position that Multimedia should follow through and submit a recapitalization plan to shareholders.

Cooke had challenged the company earlier this month to let shareholders decide if they were interested in his offer.

The company said members of its founding families had informed the board that they had fully considered Cooke’s revised proposal and had decided not to support his offer.

The family members, all of Greenville, also advised the board that they remained committed to offering shareholders the recapitalization proposal, which they said “offers shareholders a uniquely attractive opportunity”

The company’s plan would pay $41.24 a share in cash plus $26.54 in bonds, with shareholders having the option to sell shares yet still retain some equity in the company. Multimedia was trading over the counter at $56.75 on Thursday.

In a letter to the board, family members explained that “the pending recapitalization plan affords all shareholders--not just the founding families--the opportunity to continue as investors in the ongoing corporation.”

The family members further explained that their agreement was designed to protect this opportunity for all stockholders.

The company said that, because South Carolina law requires mergers be approved by holders of at least two-thirds of a company’s outstanding shares, the opposition of the family members and senior management precludes approval of Cooke’s revised proposal by shareholders.