Murdoch in No Hurry to Bid for MGM/UA

The collapse of the deal under which MGM/UA Communications Co. was to have been sold to the Australian Qintex Group drove down the prices of both companies’ shares Wednesday, while on another front, media magnate Rupert Murdoch toyed publicly with the notion of reviving his earlier offer for MGM/UA.

Murdoch--who has been in Australia for the annual shareholders meeting of his 45%-owned News Corp.--told a television audience there that News Corp. is not “lusting after” MGM/UA. According to the news reports, Murdoch added that he “certainly” would not pay Qintex’s $25-a-share price, which topped News Corp.’s offer of $23.16 last month.

By late Wednesday, no bidder had stepped forward, according to MGM/UA spokeswoman Mary Stevens Hardy. “We’re not in conversations with anybody at this point,” she said.

MGM/UA lost $1 a share, to close at $20 in composite trading on the New York Stock Exchange, with 378,600 shares changing hands. Even though the closing price was $5 below the Qintex offer of $25, one analyst said the trading pattern suggested that Wall Street expects Murdoch to make a bid.

“The market seems to think he will, but why?” said the analyst, who spoke on condition of anonymity. “If I were Rupert Murdoch, I wouldn’t be there at $23.16. . . . I think (MGM/UA is) a mess now. I think they may really have hurt the company.”

During the 6 1/2 months since MGM/UA agreed to be sold to Qintex, the studio has deferred to the would-be buyers on a number of operating decisions, including the dismissal of MGM/UA’s telecommunications president, Norman Horowitz, and its film distribution president, David M. Forbes. At Qintex’s behest, the company also passed up the opportunity to make a sequel to the hit “Child’s Play” because the incoming owners objected to making a horror film.

Even before the sale, life was unsettled for MGM/UA employees because the company had been on the auction block for a year.

No internal memo has been issued to employees since the sale’s collapse, although notice probably will be sent early next week, Hardy said.

Meanwhile, the Qintex stock price slid 2 cents on the Australian exchange, to close at 44 cents (Australian).

A worse pounding was taken by Qintex Entertainment Inc., a television production company that is 43% owned by Qintex but not directly involved in the MGM/UA bid. Qintex Entertainment declined $1.625 a share, to $4, in over-the-counter trading in the United States.

A telephone call to Qintex Chairman Christopher C. Skase at his Australian headquarters was not returned, but in Los Angeles, a company executive said Qintex has engaged new counsel to study the firm’s options, which include legal action. Earlier this week, MGM/UA sued Qintex, charging fraud and negligent misrepresentation.

Kevin Wallace, chief financial officer of Qintex America Inc., the holding company for Qintex operations outside Australia, said the law firm of Irell & Manella has been retained, even though another firm had handled the lengthy negotiations.

“We’re not able to use Skadden, Arps, Slate, Meagher & Flom because they represent both MGM and its financial adviser” on other matters, Wallace said.

Asked whether there had been any effort to patch things up between MGM/UA and Qintex, Wallace said: “I think we are still recovering from yesterday’s events. We’re still considering our options.”