Lorimar Board OKs Anti-Takeover Plan
Lorimar Telepictures announced Thursday that its board of directors approved a stockholder rights plan, but insisted that the plan was “not adopted in response to any existing effort to acquire control of Lorimar.”
The stock of the Culver City entertainment company has traded heavily in recent weeks, after dipping precipitously with the mid-October stock market crash. On Thursday, shares closed at $9, up 37.5 cents on the American Stock Exchange, with 620,900 shares changing hands, or more than twice Lorimar’s average volume of 250,000.
Lorimar shares dropped $4 to a 52-week low of $8.25 on Oct. 19, the day the Dow Jones industrial index dropped 508 points.
Published reports have speculated that Marvin Davis, former owner of 20th Century Fox Film Corp., may be acquiring Lorimar stock. But his elder son, John Davis, said Thursday, “We don’t comment on the investment activities of the family.”
Susan E. Binford, a communications consultant retained by Lorimar, said the directors voted on the action Wednesday during a regularly scheduled board meeting. Binford said the actual plan is scheduled to be filed at the Securities and Exchange Commission today, along with the company’s quarterly financial report.
Shareholders will receive details of the plan in a letter to be mailed after Nov. 23, the company said.
In a prepared statement, Lorimar said the stockholder rights will become exercisable only if an acquiring party accumulates 20% or more of the company’s common stock, or if such a party announces an offer that would result in it owning 30% or more of the common stock.
The plan provides for a dividend distribution of one right for each share of stock held as of Nov. 23; the rights would expire Nov. 11, 1997.
The company has reported losses for the last four quarters, for a cumulative loss of $93.67 million. Since June, the company has been negotiating to sell off such major assets as its six TV stations, its advertising agencies and its magazine publishing division.
