Disney Buys Out Wrather Partner for $85.2 Million

Times Staff Writer

Walt Disney Co. announced Tuesday that it has bought out its 50-50 partner in Wrather Corp. for about $85.2 million. With the purchase, Disney gains full control of a company that it quietly tried to acquire at a slightly lower price last August.

Wrather's assets include long-term leases on such Long Beach attractions as the Queen Mary and Spruce Goose and exclusive use of the Disney name on hotels in Southern California--a right granted nearly 34 years ago when Wrather built its Disneyland Hotel near Disney's theme park in Anaheim.

The hotel, on 36 acres leased from Disney until 2054, appears to be the asset most coveted by Disney.

The purchase ends nearly a year of maneuvering by both Disney and Industrial Equity (Pacific) Ltd. to acquire all or part of Wrather. Before the two joined forces last October, Disney and IEP made parallel efforts to acquire or restructure Wrather.

Disney, in fact, was spurned last August in a buyout offer of $21.50 per share. At the time, Wrather refused to disclose the bidder's identity or terms of the offer, although the information was eventually provided to shareholders who voted in January to sell the company for $21 a share.

The terms announced Tuesday indicate that Disney paid about $23.49 for each of the 3.62 million shares acquired from Industrial Equity, indicating a profit for the Hong Kong company controlled by New Zealand financier Ronald A. Brierley.

Industrial Equity first disclosed its interest in Wrather in February, 1987, when it announced that it held a 6.3% stake. The company boosted its holdings to 27.9% by the end of May. During that four-month period, Wrather's stock traded in the range of $16.25 to $20.875 a share.

Alfred Boyer, an Industrial Equity executive vice president based in La Jolla, could not be reached for comment.

But Richard D. Nanula, Disney's manager of strategic planning and acquisitions, said Disney and Industrial Equity had never considered divvying up Wrather's assets. Instead, Nanula said, the two had proposed that one firm buy out the other or operate the company as a 50-50 venture.

Disney will assume Wrather's contract to manage the Biltmore Hotel in downtown Los Angeles but not Wrather's management of the Breakers Hotel in Long Beach, which was recently sold.

Nanula said Disney will try to sell Wrather's oil and gas properties in Louisiana and Texas.

With the purchase, Disney will also assume between $95 million and $100 million in debt. With its January investment of $76 million, the total deal is valued at nearly $260 million.

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