Spurned Suitor Pursues Effort to Buy Out Taft : Group Boosts Offer to at Least $1.39 Billion

An investor group headed by Taft Broadcasting Vice Chairman Dudley S. Taft on Tuesday increased its bid for the broadcast and entertainment firm to at least $150 a share from a previous $145.

The group, whose first offer was rejected by company directors last week, said in a letter to the Cincinnati-based company that it is “committed to pursuing” the acquisition.

The investors indicated that the latest, $1.39-billion offer represented a minimum price, saying they were “prepared to discuss . . . all aspects of the offer, including price, structure and form of consideration.”

Taft Broadcasting, which rejected the initial offer as inadequate, said in a statement that the board would consider the new bid. But the company said it is also considering a restructuring of the concern, which owns 12 television and 8 radio stations, TV program production and distribution units, cable television systems and theme parks.

Taft stock closed Tuesday at $156, up $3.125 from Monday, an indication that investors expect bidding to go still higher.

Advocates Restructuring

Taft has recently seen profits evaporate and has confronted a possible selloff of assets as shareholders have clashed over its future. The principal advocate of asset sales and restructuring is Robert M. Bass, a Texas investor with a 25% stake in the company.

Carl M. Lindner, a Cincinnati investor and chairman of American Financial Corp., owns a 16% stake, and last week disclosed in a Securities and Exchange Commission filing that he may consider a bid for the company. But his views on a major asset sale are unclear.

The Taft family and another well-known Ohio family, the Ingalls, together hold 12% of company shares.

Peter P. Appert, an analyst with the C. J. Lawrence brokerage, said the latest offer may force the hand of Bass and allies that have sought a restructuring of the firm. To keep control of the firm, Bass now will have to improve on Dudley Taft’s offer, “because you have to assume Taft could get 51% of the shares with a tender offer,” Appert said. “This seems to force the issue.”

The Taft takeover group, which also includes the Narragansett Capital investment firm, cited the company’s “unstable condition” in urging the acquisition.

“Even if a restructuring transaction could be designed that would assure greater after-tax value to the shareholders than a negotiated transaction with us--which we doubt--we find it difficult to understand how a restructuring realistically can be implemented, given the conflicting interests among existing shareholder groups,” the group wrote.

Dudley Taft did not return phone calls seeking comment.