Marvin Davis Drops Offer for Spectradyne : Texas-Based Pay-TV Firm Weighing Proposals From Other Suitors
Investor Marvin Davis said Friday he has dropped his offer to buy Texas-based Spectradyne Inc., the nation’s largest supplier of cable television and pay-per-view movies for hotels.
In a short statement Friday, Spectradyne, which is based in Richardson, Tex., said it had been evaluating acquisition proposals from two unidentified parties and is continuing talks with one of them.
Speculation on Wall Street centered on Washington-based Communications Satellite Corp. as a possible buyer. The company competes with Spectradyne in providing pay-per-view movies to the lodging industry.
Davis, who owns 7.3% of Spectradyne’s 9.4 million shares, offered on May 7 to pay $37 per share, or $321.9 million, for the remainder of the company.
In negotiations with Spectradyne over the past four days, Davis indicated that he was willing to raise his bid to $41 per share, or $355.5 million, but the company said it had received another acquisition proposal.
Davis said he withdrew his offer because it wasn’t acted upon by the May 14 deadline he set.
Davis, who owns about 693,000 shares of Spectradyne, stands to make a hefty profit if the other bidder matches or tops the $41 per share he was willing to offer.
He paid between $22 and $28 per share for his initial 538,000 shares and between $36 and $38 per share for the remainder.
It was widely believed that Davis, an investor who splits his time between Denver and Los Angeles, was seeking Spectradyne in an effort to be get back into the entertainment business.
Davis owned 20th Century Fox Film Corp. for four years until selling it in 1985 to media magnate Rupert Murdoch for $575 million. Last year, he was rebuffed in a $3.75-billion bid to acquire CBS.
More recently, he made a $200-million bid for Resorts International but the company rejected his offer.
Spectradyne provides pay TV systems at about 750 hotels and it recently introduced an automated checkout system that lets hotel guests complete much of the checkout process on the television sets in their rooms.
Davis had said that if his offer was successful, he intended to retain Spectradyne’s management and to keep the company’s headquarters in Richardson.
Spectradyne rose another $1.625 to $42.625 in over-the-counter trading Friday amid the takeover speculation.
Spectradyne has been growing rapidly with its service that provides pay-per-view movies to hotel guests in their rooms. Last year, it earned $6.9 million on revenue of $76.9 million.
