Investor Group Acquires 8.4% of Berkey Inc. : First Media, Bluhdorn May Try to Revamp Firm

First Media, an investment banking partnership formed earlier this year, disclosed Tuesday that it has joined forces with producer Paul Bluhdorn to acquire 8.4% of Berkey Inc., a distributor of photographic and electronic equipment.

Berkey is widely known as a film processor, but the Greenwich, Conn.-based company actually sold that business last September for about $40 million, and changed its name to Berkey Inc. from Berkey Photo.

Nearly half of the company’s sales last year were generated by its wholesale distribution business, but the division reported a slight loss due to the weakening dollar. Berkey imported about 85% of its photographic and video equipment last year, largely from Japan and West Germany, where currencies have strengthened against the dollar.

The price of Berkey shares closed Tuesday at $5.375, down 25 cents, on the New York Stock Exchange.

At those prices, the company has a book value of about $26 million.

According to documents filed at the Securities and Exchange Commission, First Media has invested $812,433 since Sept. 8 to acquire 198,750 shares, or 4.2%.

‘Underutilized’ Assets

Bluhdorn, the son of the late Gulf & Western Industries Chairman Charles G. Bluhdorn, has invested a similar sum to acquire 197,650 shares. Bluhdorn disclosed that he borrowed about $250,000 from his mother, Yvette Bluhdorn, to buy his shares.

Bluhdorn and First Media said they believe that “certain assets” of the company “might be underutilized and could be redirected for the purpose of providing a higher return to all shareholders.”

Among other things, “we are really impressed with Berky’s distribution system,” explained Clifford Miller, spokesman for the investor group. The system, which has warehouses located in California, Tennessee, Maryland and Michigan, “exceeds current usage,” Miller said, adding that “we can see a lot of other uses for that distribution system.”

First Media was formed last spring by Jac Holzman, a former Panavision chairman and founder of both Elektra and Nonesuch Records, and Jonathan T. Taplin, a film producer who most recently worked as a vice president of mergers and acquisitions for Merrill Lynch Capital Markets.

Bluhdorn, 31, served six years as an executive at Paramount Pictures, a Gulf & Western subsidiary, before moving to 20th Century Fox Film as an independent producer this year.

In their SEC filing, First Media and Bluhdorn said they met with Berkey Chairman A. Michael Victory at the latter’s request. According to the filing, Victory presented a “summary overview of the company’s present position based on publicly available information.”

Efforts to reach Berkey executives late Monday were unsuccessful.