A New Studio Chief in Town : Qintex Deal for MGM/UA Would Put Australian Christopher Skase in Charge

Christopher Skase is no Rupert Murdoch--not in background and certainly not in name recognition. But with his deal last Friday to buy most of the assets of MGM/UA Communications, Skase is preparing to follow in the famous media baron’s tracks to become the second Australian to take over a major Hollywood movie studio.

The 40-year-old Skase is the majority shareholder of Brisbane-based Qintex Group, which boasts $2 billion of assets in resorts and television broadcasting and programming. An American subsidiary, Qintex Entertainment, got a quick boost for its profile in February as co-producer of the hit TV miniseries “Lonesome Dove.”

Qintex Entertainment expects to change its own name to United Artists if the complex deal with MGM/UA goes through, according to the subsidiary’s executive vice president, Jonathan D. Lloyd.

Although the overall price starts out at $1 billion for MGM/UA, Qintex will end up with UA--including a big movie library that includes Academy Award winner “Rain Man” and the James Bond series--along with the MGM/UA film production, distribution and home video units--for an estimated “effective cost” of about $600 million. (After acquiring all of MGM/UA, Qintex will immediately resell some of the studio’s assets back to MGM/UA controlling shareholder Kirk Kerkorian.)

Dislikes Murdoch Comparisons

Just last fall, skeptics were applying a grain or more of salt to Skase’s quiet assertion that he intended to expand his relatively small U.S. presence--which he estimated then at about $400 million--by investing another “$2 billion over the next five years.”

Now Skase has dropped the other shoe.

Although he likely will spend a lot more time in Hollywood in the future and assume the title of UA chairman, Skase is expected to leave the management to others, much as Murdoch, 58, has done at 20th Century Fox since acquiring it four years ago.

However, Skase doesn’t relish comparisons to Murdoch. While on a visit to Hollywood last October, Skase told The Times: “I am not seeking to emulate anyone.” For emphasis, he added the British-style punctuation, “full stop.”

While Rupert Murdoch was the scion of a newspaper baron, Skase--whose name rhymes with case --is a former financial journalist whose father was a popular radio disc jockey.

Unlike Murdoch, Skase is not expected to become a U.S. resident and citizen. A Qintex source indicated that Skase would like to discourage speculation to the contrary, since it might adversely affect his broadcasting licenses in Australia.

After a couple of years as a stockbroker, Skase tried financial journalism for another four before becoming a venture capitalist. He parlayed a flock of small investments as a venture capitalist into his present position as 51% stockholder of publicly traded Qintex Ltd., which in turn owns 55% of Qintex Group, according to Australian and British press accounts in recent years.

Purchased Network

Qintex was a small retailer when Skase took it over. According to Qintex lore, Skase became a millionaire by the time he was 30, as he had predicted to friends. Last year, an Australian business publication estimated his personal fortune at $65 million (Australian).

His Qintex got into television broadcasting with two Queensland TV stations. But what finally put Skase on the financial map in a large way was the 1987 purchase of one of Australia’s three television networks, Channel 7, with stations in Brisbane, Melbourne and Sydney.

The network bought Perth and Adelaide stations last year, increasing its coverage to an estimated 75% of Australian homes. The parent company also owns the Mirage resorts, one on the Hawaiian island of Kauai and two others in Australia.

Just last month, however, Qintex moved to reduce its debt load and strengthen its balance sheet by selling a 49% interest in the Mirage resorts to two Japanese companies for $350 million.

Qintex’s 43%-owned Qintex Entertainment was formed in April, 1986, from the merged Hal Roach Studios and Robert Halmi Inc. Although the U.S. subsidiary lost $6.8 million last year, it has gone into the black this year, reporting a $1.8-million profit in the second quarter ended Jan. 31.

Lawsuit Filed

As frequently happens in a major acquisition, the Qintex deal with MGM/UA has quickly drawn stockholder lawsuits.

Chappaqua Family Trust, New York, filed a minority shareholder’s derivative action Monday in Los Angeles Superior Court on behalf of MGM/UA. It alleged that Kerkorian and other directors and officers of MGM/UA, as well as Qintex’s Australian and U.S. subsidiaries, breached their fiduciary duty to MGM/UA and its shareholders and caused them “irreparable damage” because the price was “inadequate, unfair and fraudulently determined.”

The suit was filed for the plaintiff by Greenfield & Chimicles, which frequently represents public stockholders. Barry Fink of Christensen, White, Miller, Fink & Jacobs, representing MGM/UA, said the allegations were “without merit.”