Giant Group Ltd.--a holding company whose odd mix of assets includes two cement manufacturing firms and the TV production company that gave the world "The Gong Show"--said Monday that it may sell its cement operations.
Beverly Hills-based Giant said in a statement that it "has received inquiries from, and is having discussions with third parties relating to the sale" of its cement operations, Giant Cement Co. of Columbia, S.C., and Keystone Cement Co. of Bath, Pa.
Giant stock closed Monday at $18.50, up $3.625 on the New York Stock Exchange. Giant Group Chairman Burt Sugarman, who is also a successful TV and movie producer, was not available for comment Monday.
Analysts say that the company's cement operations are valued at about $170 million. According to M. Craig Schwerdt, an analyst for the Los Angeles investment firm of Morgan Olmstead, the most likely buyer would be "a major, international industrial waste management company.
The principal attraction would be Giant's waste burning operation, its huge cement kilns."
Cement kilns, which are capable of firing up to 2,700 degrees Fahrenheit, have recently become recognized as relatively clean and safe way to dispose of hazardous and toxic waste products.
In an interview with The Times a year ago, Sugarman said he began investing in the cement business in 1983 "because I saw the waste-burning business coming. Nobody wants a landfill in their backyard. It's possible that in the not too distant future cement will be just a byproduct of waste burning."
Stephen Weinress, a partner in the Los Angeles investment banking firm L. H. Friend & Co., thinks that time has come and that Sugarman is about to cash in on it. "There are 253 cement kilns in the U.S., only 17 have permits from the Environmental Protection Agency to burn hazardous wastes and seven of those belong to Giant," Weinress said. "Giant has a valuable commodity there that nobody has focused on."
Both Weinress and Schwerdt said they believe that Sugarman ultimately will sell his cement holdings. "Burt's an opportunist and the fact that he can get a good price now when other stock prices are depressed might be dictating the timing," Schwerdt said.
Last year, Giant Group paid $26 million for 2 million outstanding shares--23%--of Barris Industries, a Beverly Hills TV production-syndication firm headed by game-show producer Chuck Barris. As part of the agreement, Sugarman became chairman of Barris Industries and Barris returned to creating and producing shows for the company.
A good friend of Sugarman's, Barris is best known for such silly-but-successful shows as "The Dating Game," "The Newlywed Game" and "The Gong Show."
Barris Industries said last month that it has acquired a 9.8% stock in Media General and may seek control of the big newspaper and broadcasting company. Analyst Weinress speculated that Sugarman might use the profit of the cement sale to buy more shares of Media General.
"If I were the management of Media General, I wouldn't take Burt Sugarman too lightly," Weinress said. "He is very good at making companies realize their value, and if they don't realize it, he does for them."