Bass to Acquire Wometco for $625 Million

Texas financier Robert M. Bass, who controls a 21% stake in Taft Broadcasting, announced Tuesday that a Bass-led group has agreed to acquire Wometco Cable TV Inc. for $625 million in cash.

Bass said his group expects to enlist Taft as a partner, as well as certain members of Wometco Cable’s current management.

Wometco operates the nation’s 27th-largest cable-TV company, with about 350,000 subscribers concentrated largely in six Southeastern states. Since April, 1984, it has been controlled by Kohlberg Kravis Roberts & Co., a New York investment firm that specializes in leveraged buyouts.

Taft, through a joint venture formed in 1981 with industry leader Tele-Communications, already has cable-TV holdings in five states, with its largest systems located in Michigan. TCI-Taft Cablevision Associates serves about 160,000 subscribers and has attracted the personal interest of Robert Bass, according to one industry source.

Commitment to Taft

Tuesday’s announcement indicates Bass’ “commitment to the (Taft) company,” one investment banker said, noting that the Texas financier wants to reduce Taft’s television holdings but reinvest in cable.

Taft is currently trying to sell its five independent TV stations for $250 million to reduce the debt amassed from its $760-million acquisition of Gulf Broadcast Co. last year. But one source noted that even if Taft’s independent stations fetch their asking price, the company will record a book-value loss of $75 million because they “overpaid for syndicated programming, and advertising has gone very soft.”

Cincinnati-based Taft said its management will recommend to its board that Taft join the Bass group in a joint venture to acquire Wometco. Taft directors are scheduled to meet Thursday. Of the 17-member board, four directors are Bass representatives who joined the board last May.

Expected to Participate

In a telephone interview, Wometco Cable President John Milton Lewis said he expects to be part of the buyout group, but he declined to say how many other executives might be included or how large a stake they might hold.

Lewis said he did not know whether Wometco cable-TV properties would become part of the TCI-Taft venture.

Since Wometco’s parent and affiliated companies were taken private in a $1-billion buyout, Kohlberg Kravis has dismantled the company and found buyers for nearly all of its assets.

Storer Communications, another company controlled by Kohlberg Kravis, said two months ago that it had “expressed an interest” in acquiring Wometco Cable, but no price was disclosed. According to the Wall Street Journal, Storer had planned to pay $600 million, but “investors’ dissatisfaction” in part persuaded Kohlberg Kravis to scrap the plan.