Jilting Parretti, New World Sells Out to Perelman for $145 Million

New York entrepreneur Ronald O. Perelman stole a march on the competition Monday with the surprise announcement of a definitive agreement to buy New World Entertainment for $145 million.

Six weeks earlier, the Los Angeles-based television production company had signed a tentative deal to sell out to Hollywood newcomer Giancarlo Parretti for $138 million.

Andrews Group, a publicly traded company controlled by Perelman, is buying New World. Andrews’ chief executive, William C. Bevins Jr., said in an interview that the move is part of a plan to become “a meaningful player in the entertainment and media businesses.”

Perelman, a corporate raider who controls Revlon Group and recently agreed to buy Coleman Co. for $545 million, had seemed to be getting out of entertainment. Last fall, he sold Technicolor to Britain’s Carlton Communications for $780 million.

Will Halt Movie Investments

In January, however, he bought New World’s Marvel Entertainment Group, publisher of Marvel comic books, for $82.5 million.

Bevins, former financial chief for cable television pioneer Ted Turner, said Monday that he is mainly interested in New World’s television production and distribution facilities and sees no reason to make management changes in those areas. New World’s TV productions include “The Wonder Years” and “Tour of Duty” for network prime time and the daytime soap “Santa Barbara.”

Bevins said he has “very little interest” in any theatrical film production investments and indicated that he will “substantially reduce or eliminate” risking capital in that area. New World’s movie production program has been a failure in recent years.

At the same time New World signed its deal with Andrews, it exercised its right to cancel its deal with Parretti because the Andrews proposal “provides greater value for New World shareholders,” according to the company.

Parretti, who last year obtained control of Cannon Group and recently renamed it Pathe, has been seeking to put together a larger U.S. entertainment operation. However, the controversial Italian also has failed to acquire two of his proclaimed targets, MGM/UA Communications and De Laurentiis Entertainment Group.

Through a spokesman, Parretti said late Monday that Pathe had been invited to submit a higher offer but declined to be “drawn into a bidding contest which pushes the price beyond New World’s utility to us.” He said Pathe will receive a termination fee of $3 million from New World under their agreement.

Andrews Group is to begin a tender offer of $8.95 a share in cash for New World common stock within five business days, the parties announced. They said they expect to close their merger shortly after completion of the offer.

Parretti had agreed in late February to pay $8.20 a share for New World--$3.40 in cash and a non-interest-bearing note valued at $4.80 payable April 2, 1990. At the time, some observers were skeptical about the ultimate value of the notes.

Stock Swap for Executives

Analyst Jeffrey Logsdon of Crowell, Weedon & Co., a Los Angeles securities firm, said Monday that Perelman appeared to be a “much stronger buyer” and the all-cash terms a better deal for New World shareholders. He noted that Perelman has “people who understand the (entertainment) industry well, have deep pockets and know-how to operate.”

The holders of a majority of New World’s voting power--Co-Chairmen Harry Evans Sloan, Lawrence L. Kuppin and Robert Rehme--have agreed to swap most of their New World holdings for securities of an Andrews Group affiliate if a majority of public shareholders agree to sell their shares in the tender offer.

Sloan and Kuppin, who acquired New World in 1983, will remain “in a consulting capacity,” Bevins said. Arrangements with Rehme, who is chief executive, “have not been discussed,” he said.

Bevins, who maintains an office in Beverly Hills, said he joined Andrews Group last July and began looking for investment opportunities in entertainment and media. Although the firm until now has not acquired any media properties, Bevins said he will “look at almost everything that comes available,” whether in publishing or in broadcast and cable properties.

Manageable Risks

When Andrews bought Marvel from New World in January, he said, Kuppin and Sloan were not interested in selling the television operations. When it appeared that New World itself was going to be sold, Bevins added, Andrews studied the company and submitted an offer on Friday.

He said New World has a strong television group with “a nice, solid record of quality productions,” such as “The Wonder Years,” which has “some nice long-term upside” potential. He said he is “intrigued” by the programming business and finds the risk is more manageable there than in theatrical films.

Andrews Group had identified and targeted television production as an attractive investment long ago, Bevins said, adding:

“Opportunity knocked and we answered.”