Firm Reports $4.65-Million Loss for Quarter : Kerkorian Mum as MGM/UA Mulls Overtures

MGM/UA Communications, amid fresh losses for the entertainment company, said Wednesday that it has received new inquiries this week from interested buyers and has formed a special directors’ committee to consider the overtures.

But MGM/UA gave no clue as to whether financier Kirk Kerkorian, who controls 82% of the stock, is actively interested in selling the company that he formed scarcely two years ago with key assets from a predecessor studio. Kerkorian’s name appeared nowhere in the company’s release.

“I can’t add anything,” said MGM/UA Chairman and Chief Executive Lee Rich, who--with two longtime Kerkorian associates, Steven D. Silbert and Fred Benninger--will serve on the three-man committee reviewing the inquiries. Silbert is MGM/UA ‘s president and chief operating officer, while Benninger is the top executive of MGM Grand, a hotel-casino and airline business also controlled by 70-year-old Kerkorian.

The price of MGM/UA stock rose 12.5 cents a share to close at $13.75 on the New York Stock Exchange, with a volume of 461,800 shares changing hands. At that price, the stock has almost reached its 52-week high of $13.875.

Activity in the stock on Monday prompted a query by the New York Stock Exchange, which in turn prompted the company to disclose that it had received “several” inquiries in the past from possible buyers. The company would not disclose the identity of the interested parties or the dates of the inquiries. On Wednesday, however, MGM/UA said its special committee will “promptly consider” offers.

Separately, the motion picture and television company reported a net loss of $4.65 million for the three months ended Feb. 29, compared to a $17.06-million loss in a similar period a year earlier. For the six months ended Feb. 29, the company reported a loss of $2.57 million, compared to a $14.44-million loss a year earlier.

The loss came despite significant improvement in second-quarter operating income, which rose to $16.3 million, compared to a loss of $1.5 million a year ago. The company’s interest expense in the second quarter increased to $12.5 million from $9.4 million a year ago.

Second-quarter revenue rose to $157.88 million, up from $106.24 million. For the six months, the Beverly Hills company reported total revenue of $339.86 million, up from $237.23 million a year ago.

Rich, a longtime Lorimar executive who moved to MGM/UA in 1986, said the company was “extremely pleased” with its progress in the two years since Kerkorian sold a predecessor company, MGM/UA Entertainment, to Turner Broadcasting System. Kerkorian repurchased the United Artists library from Turner, then repurchased certain other MGM assets, such as the Metro-Goldwyn-Mayer name, its home-video business, and television and motion picture projects.

Rich noted that 214 titles owned by United Artists returned to the home-video library in January after a licensing deal with CBS/Fox expired. Home-video and pay-television revenue rose to $63.99 million for the second quarter from $53.56 million a year earlier.

The biggest revenue gain was posted by the theatrical distribution unit, which reported $56.8 million for the second quarter, up from $15.3 million a year earlier.