Sony Offering $200 Million for Producers’ Firm : Guber, Peters May Have Key Roles at Columbia

Sony Corp., fresh from announcing a $3.4-billion bid for Columbia Pictures Entertainment, on Thursday offered more than $200 million to buy the hot production company run by its two apparent choices to lead Columbia.

Sony said it will begin next week a $17.50-a-share tender offer for Guber-Peters Entertainment Co., headed by producers Peter Guber and Jon Peters. Though Sony has not yet announced a final deal with the pair, Guber is expected to be the new chief executive of Columbia, and Peters is expected to have a key role as well.

But an obstacle remains in Guber-Peters’ obligations to Columbia rival Warner Bros., with which it signed a five-year exclusive movie production and distribution deal last month. Guber-Peters produced such hits as “Batman” for Warner and has a number of films in production, including one based on Tom Wolfe’s “Bonfire of the Vanities.”

Could Close by Year-End

A Warner Bros. spokesman, Robert Friedman, wouldn’t comment on the conflict, except to note: “They’re still under contract to us.” The two sides have met to discuss the matter, industry sources say.

Sony stipulated that the deal was contingent on the “modification of certain Guber-Peters agreements on terms satisfactory to Sony.” Sony, which said it expected the deal to be closed before the end of the year, also wouldn’t comment on Guber-Peters’ commitment to Warner.

The two producers, who declined comment Thursday, each own 1.5 million shares, or 13.8%, of the company. The tender offer stands to make them $26.25 million apiece.

The pair are among Hollywood’s most successful producers. In the mid-1970s, Guber was the head of worldwide production for Columbia Pictures.

Guber-Peters has gone through a series of transformations in recent years. It was controlled by producer Burt Sugarman until last May and, earlier, by low-budget game show innovator Chuck Barris. Until a few weeks ago, it was called Barris Industries.

Its assets include rights to such TV shows as “The Gong Show” and “The Newlywed Game,” expected future income from such Guber-Peters films as “Batman” and “Rain Man,” a small studio lighting company, a management consulting firm and other operations.

But “clearly, the key to the value of this company is in the value of the two executives,” said investment banker Michael E. Tennenbaum, vice chairman of the Bear, Stearns & Co. investment firm in Los Angeles. “You couldn’t come near the $17.50 a share without them.”

The investment bank was retained by an independent committee of Guber-Peters’ board to evaluate the bid from the shareholders’ perspective. The firm concluded that it was fair, Tennenbaum said.

In the fiscal year ended May 31, Guber-Peters lost $19.2 million on revenue of $23.7 million. The company has yet to realize any profits from either “Rain Man” or “Batman.”

Guber-Peters stock has recently traded around $12 a share, and was as low as $5 a share after the October, 1987, stock market crash.

$30 Million in Debts

The largest block of stock is a 24.4% stake held by an Australian venture capital company, Westfield Holdings, whose head, Frank Lowry, is Guber-Peters’ chairman. Westfield bought the stake last May from Sugarman, who then stepped down from the company. Chuck Barris sold the last of his shares in May, 1987.

Guber and Peters sold their closely held production company to Barris Industries last year.

Purchase of the 11.0 million shares of stock outstanding would cost Sony $193 million. Guber-Peters also has about $30 million in other debts outstanding, including 6.75% convertible debentures, analysts said.

The announcement was good news for Stephen D. Weinress, principal in the Los Angeles investment firm of L. H. Friend, Weinress & Frankson, who had staunchly recommended the stock for some time despite the company’s scant profits.