May Seek More Seats on Board, SEC Filing Shows : Chris-Craft Hikes Stake in Warner
Chris-Craft Industries disclosed Tuesday that it has increased its stake in Warner Communications to 29.4% and moved a step closer to a proxy fight.
In documents filed at the Securities and Exchange Commission, Chris-Craft said it is “considering seeking increased representation” on Warner’s board, where it currently holds three of 14 seats.
Earlier this month, Chris-Craft had unsuccessful discussions with Warner about increasing Chris-Craft’s representation on the Warner board and various committees but stopped short of suggesting that it might propose its own slate of directors.
No proxies have been printed or mailed yet to Warner shareholders for an annual meeting scheduled Aug. 9. Under the laws of Delaware, where Warner is incorporated, notice to shareholders must be sent no fewer than 10 days nor more than 60 days before the meeting.
Chris-Craft, the largest shareholder of the giant entertainment firm, first admitted that its relations with Warner were deteriorating in early June, when it told the SEC that it might increase its 28.5% voting stake or talk to other Warner shareholders to determine “whether there is a community of interest in seeking to promote greater sensitivity of the (Warner) board . . . to stockholder interests.”
Eighteen months earlier, Chris-Craft had been heralded as a friendly investor when Warner was fighting off a takeover threat posed by Australian publisher Rupert Murdoch.
In the intervening months, however, Warner Chairman Steven J. Ross and Chris-Craft Chairman Herbert J. Siegel reportedly clashed and tried unsuccessfully to untangle the two companies’ affairs.
According to its SEC filing in early June, Chris-Craft made the decision to seek more voting control only after the collapse of talks with a Ross-led investor group concerning a buy-out of Warner’s public shareholders, including Chris-Craft. In Tuesday’s filing, Chris-Craft disclosed that it has spent nearly $20 million to acquire 699,200 shares of common and preferred Warner stock in a recent 16-day period.
Warner shares closed Tuesday on the New York Stock Exchange at $30.375, down 12.5 cents, on a volume of 293,200 shares. In the past 52 weeks, Warner’s common stock has traded as low as $17 and as high as $30.625.
In its filing Tuesday, Chris-Craft also disclosed that it is negotiating with its lenders to increase the borrowing capacity of two Chris-Craft subsidiaries, BHC Inc. and United Television Inc.
BHC is negotiating to increase its revolving credit to $250 million, up from $150 million, while United Television is negotiating a new credit agreement that would earmark $50 million for the purchase of Warner stock.
David Bither, Warner’s manager of corporate communications, declined to comment on the latest Chris-Craft filing.