CBS May Sell Its Interest in Tri-Star

CBS, which has been pondering ways to cut the debt that it acquired while fighting off Ted Turner’s takeover bid, confirmed Thursday that it may sell its interest in Tri-Star Pictures, a Hollywood movie producer and distributor. The stock is valued at about $50 million at the current market price.

CBS’ partners in Tri-Star--Home Box Office and Columbia Pictures Industries--have a right of first refusal on any shares that CBS decides to sell, the network noted.

Tri-Star itself filed a shelf registration Thursday with the Securities and Exchange Commission “to facilitate any possible sales of shares,” CBS said.

A shelf registration gives a company the ability to sell up to a specified number of shares anytime it wants within a certain period.

According to Leslie Jacobson, Tri-Star executive vice president and general counsel, the filing reflects the fact that there has not yet been a determination about disposing of the CBS-owned stock.

Tri-Star’s stock has traded in the over-the-counter market since earlier this year, when the firm sold 2.5 million units of stock and warrants to the public for $8.50 each. The shares alone have recently been trading at just under $8.

Assuming conversion of the warrants, the three original one-third owners now hold 25.5% each. When Tri-Star was founded in February, 1983, the partners invested a total of $50 million, and they later added a like amount. Because of tax considerations, Tri-Star’s investment is carried CBS’ books at less than $30 million, according to a company report.

Tri-Star’s current major box-office hit, “Rambo: First Blood Part II,” enabled it to report net income of $5 million for the second quarter, compared to a $2.3-million net loss a year earlier.

CBS is pledged to sell assets over the next two years that would yield an after-tax profit of $300 million. It will apply the proceeds to its $950-million debt from a buy-back of stock that succeeded in blocking cable entrepreneur Turner’s attempted hostile takeover earlier this year.

Earlier this week, CBS said that it will sell KMOX-TV, St. Louis, one of five TV stations that it owns. Industry sources have indicated that it could bring a price of $130 million to $200 million.