Davis Makes Cash Bid of $771 Million for Lorimar : Ailing Company, Already Talking With Warner, Will ‘Bear in Mind’ Oilman’s Conditional Offer

Marvin Davis, the wealthy oilman who has searched for a new Hollywood investment since selling 20th Century Fox Film Corp. in 1985, has made a conditional cash offer of about $771 million for Lorimar Telepictures, the company disclosed Thursday.

Lorimar said it would “bear Mr. Davis’ letter in mind” but provided no other details. Even though Lorimar insists that it is not necessarily for sale, the Davis maneuver appears designed to accelerate bidding for the Culver City-based entertainment firm, which leads the industry in network television programming but has been plagued by losses in its movie and home-video units.

Lorimar is already engaged in discussions with Warner Communications about the possibility of a business combination.

Warner representatives began pouring over Lorimar’s books last weekend, and Davis--in a letter mailed earlier this week--asked for the same access to internal documents, industry sources said. But as of Thursday, Lorimar had not responded directly to that request.

Davis’ letter apparently expressed a willingness to pay at least $17 per share in cash for all of the company’s outstanding shares, one source said. Analysts have recently valued the stock in a range of $14 to $18 per share.

Davis owns at least 2% of Lorimar’s 46 million shares outstanding, but the 62-year-old tycoon has “vacillated for about a year about what to do,” one Wall Street source said.

Since selling the Fox studio for $575 million, Davis has bought and sold positions in a number of entertainment industry stocks, creating some skepticism on Wall Street about the sincerity of his interest in actually acquiring a company outright.

“He’s got real money, and he does do real things, but he does do some talking that doesn’t come to anything,” said one securities analyst, who asked not to be identified.

Lorimar stock closed Thursday at $15.375 a share, up $1, on volume of nearly 2.2 million shares. In contrast, nearly 3.5 million shares changed hands on Monday after Lorimar announced that Warner had approached the company to explore the desirability of a business combination.

Warner’s overture--and the public disclosure on Monday--may have spurred Davis to action, one analyst said, and Warner in turn may act with more alacrity. “They’re probably cross-triggering each other,” the analyst said, noting that top Lorimar executives are expected to spend the next few days in New York, where Warner is headquartered.

Kenneth Lerer, an outside corporate communications adviser retained by Lorimar, said Lorimar’s 15-member board is expected to meet Wednesday at a previously scheduled session in New York. Lerer confirmed that Lorimar Chairman and Chief Executive Merv Adelson and Michael N. Garin, one of four members of Lorimar’s office of the president, were journeying to New York on Thursday afternoon.

After the 1985 sale of the Fox studio to media magnate Rupert Murdoch for $575 million, Davis made headlines in March, 1986, with a $3.75-billion offer for CBS, which was declined. Analysts scorned the $160-per-share offer as inadequate for the company’s estimated breakup value of $200 a share. (Davis’ offer was later recalled ruefully by some who complained that control of CBS passed to Loews Corp. for a lesser sum because Loews bought much of its 24.9% stake on the open market and in private purchases ranging from $104.50 to $143.50 per share.)

Late in 1986, Davis bought the landmark Beverly Hills Hotel for $136 million, but he sold it less than a year later to the sultan of Brunei.

Davis also led a group of investors in a $191-million bid last year for Resorts International, but the bid had little chance of success since the founder’s estate had already agreed to sell its shares to New York real estate developer Donald J. Trump.

In 1987, Davis also made a $355.5-million bid for Spectradyne, a company that provides cable television and pay-per-view movies to hotels, but he eventually withdrew his offer when other suitors materialized.

Last fall, Davis sold a chunk of his stock in Aaron Spelling Productions, taking a loss of as much as 35% on his investment in the television production firm.