Davis Willing to Top Warner Bid to Buy Lorimar

Los Angeles investor Marvin Davis has renewed his efforts to negotiate a purchase of Lorimar Telepictures. He formally asked for a look at the entertainment company’s books “in contemplation of” making a $15-a-share cash offer, Lorimar disclosed Thursday.

Lorimar has about 45.3 million shares outstanding, which would make a Davis offer worth about $680 million.

The troubled Culver City television and movie producer said it would respond to Davis’ request for information “in due course.”

A $15-a-share offer would be substantially larger than the present value of the stock swap deal that Lorimar accepted Tuesday from entertainment giant Warner Communications.

Under the agreement in principle, Warner would exchange 0.415 share of its common stock for each Lorimar share. Warner’s shares closed Thursday at $32.50, up 67.5 cents, on the New York Stock Exchange. The Warner offer would thus be worth $13.49 per Lorimar share today, compared to $13.64 on Tuesday.

Under the agreement, Lorimar has the option of turning down the Warner transaction if the value to Lorimar shareholders winds up being less than $15 a share when the deal is expected to close in late summer.

Might Raise Bid

While some industry analysts continue to wonder whether Davis is a serious bidder, he is again making sounds like he is one. In March, he said he would offer $17 a share if Lorimar would open its books. However, Lorimar has not given Davis access so far, even during the month that followed an announced “end” to the company’s merger talks with Warner.

Davis, an oil baron who owned 20th Century Fox Film Corp. in the early 1980s, said in a letter released Thursday by Lorimar that a $15-a-share offer would “promptly” follow a satisfactory conclusion to a review of the information he requested.

Further, Davis said he is prepared to raise his offer if the review should substantiate higher values.

Industry observers are particularly interested in the position of Merv Adelson, Lorimar’s co-founder, chairman and chief executive, who has added clout as the company’s largest shareholder.

Adelson, who indicated Monday that he was pleased to become Warner co-chairman under the agreed-upon deal, owns or has voting control over about 9% of Lorimar’s stock. According to a new filing with the Securities and Exchange Commission, Adelson bought another 157,122 Lorimar shares on May 6 from Michael N. Garin--the same day Lorimar announced Garin’s resignation as one of four members of its office of the president.

Another 157,122 shares were bought from Garin at the same time by Adelson associate Irwin Molasky, the filing said. Adelson votes Molasky’s shares under an irrevocable proxy.

Adelson said after the Warner agreement was announced that he expected the deal to be consummated, despite the provision that Lorimar could cancel it if Warner’s stock were worth less than $15 for the fractional share specified in the swap. Steven J. Ross, Warner chief executive, voiced the same sentiment.

As for Davis’ overtures, Adelson was quoted in one published report Tuesday as saying that Lorimar was “never, ever for sale,” that the firm dealt with Warner because of the chance to share in its strength through a tax-free stock swap.

Some industry observers noted that many of Lorimar’s shareholders bought their stock when it was higher than $15 and thus would not benefit from the tax-free aspect.