New Zealander and Disney Co. to Buy Wrather

Times Staff Writer

Walt Disney Co. and New Zealand millionaire Ronald A. Brierley said Monday that they will jointly buy Wrather Corp., which owns the Disneyland Hotel in Anaheim and leases the Queen Mary and Spruce Goose tourist attractions in Long Beach.

Industrial Equity (Pacific) Ltd. of Hong Kong, controlled by Brierley, is joining Disney as a 50-50 partner in a new company that will pay $21 a share for all of Wrather’s 7.3 million publicly traded shares, or an indicated price of $152.3 million.

The Wrather family, which owns about 36% of the firm, has given its blessing to the deal by agreeing to sell its shares to the partners. Less than two months ago, the Beverly Hills firm rejected an unsolicited merger offer because of certain conditions. Although not named, the suitor was widely presumed to be Industrial Equity, which had amassed 28% of Wrather’s stock and indicated that it might boost its stake above 50%.

Deal Subject to Approval


Neither Industrial Equity nor Wrather would say Monday if the offer rejected Aug. 2 was from Industrial Equity. Shortly after the rejection, Wrather Chairman Bonita Granville Wrather and President Christopher Wrather had said they would consider selling the family’s holdings as part of a merger that was “in the best interests of all . . . shareholders.”

When it rejected the earlier offer, the company also adopted a “poison pill” takeover defense.

Alfred Boyer, a Brierley executive involved in the joint purchase, said his firm approached Disney late last week.

“We were sitting there with 28% of the stock,” Boyer said. “Disney, with Disneyland, was the logical one to contact.”


The deal is subject to approval by a vote of Wrather shareholders. The company’s general counsel, Henry Pollard, said a vote probably will be held near the end of the year.

Brierley, who operates from Sydney, Australia, has a reputation for making aggressive investments through several publicly held firms. His holdings include real estate, oil and gas, retailing, banking, publishing, brewing, car dealerships and hotels.

In recent years, he has expanded into international investments, including stakes in various U.S. companies, several of them based in Los Angeles.

Monday’s announcement did not say what Disney and Brierley expect to do about operating the Wrather properties. Although the company has reported net losses for the last eight years, those figures have reflected large depreciation expenses. In 1986, it lost $8.8 million on $106 million in revenue.

Boyer, Industrial Equity’s executive vice president for North American operations, said his firm and Disney “will develop a business plan” for Wrather’s operations. He said both buyers are splitting the cost of the purchase.

Michael D. Eisner, Disney chairman and chief executive, noted that his company has “a unique interest” in the Disneyland Hotel and that participation in its acquisition “came to be in our interest.” He said that, after the deal is consummated, Disney and its partner will “have to come to a joint arrangement on how (the operation) will work.”

The late Jack D. Wrather Jr. built the Disneyland Hotel in the mid-1950s, when Walt Disney was developing the nearby amusement park. Wrather signed a 99-year lease on Disney-owned land and obtained a right to use the Disney name for the establishment. The hotel, which started with 100 rooms, now has 1,174 rooms and a convention center.

Wrather acquired a 40-year lease on the Queen Mary from the City of Long Beach in 1980 and three years later opened the famed Howard Hughes flying boat, the Spruce Goose, nearby. Pollard said the firm’s long-term plans are proceeding for developing a hotel and recreational facilities on the same leasehold.


The firm also manages the Biltmore Hotel in downtown Los Angeles and the Breakers Hotel in Long Beach, and conducts oil and gas drilling. In 1985, it sold its television and motion picture properties.


Beverly Hills-based company is involved in hotel operation and energy exploration. Wrather Hotels Inc. owns and operates the Disneyland Hotel complex in Anaheim; the company also manages the Breakers in Long Beach and the Biltmore in Los Angeles. Wrather Port Properties Ltd. operates the Queen Mary and Spruce Goose attractions at the Port of Long Beach. The energy unit, Wrather Development Corp., has proven reserves of 1.075 million barrels of oil in Texas and Louisiana.

Assets $123 million

Shares outstanding 7.2 million

12-month price range $14.125-$24.875

Monday close (AMEX) $20.25, unchanged