FNN, Infotech Directors Hire Firm to Sell Assets
The directors of Financial News Network Inc. and Infotechnology Inc., confirming what analysts had expected, on Wednesday hired New York investment bank Wertheim Schroder & Co. to sell the financially troubled companies’ assets.
The directors also charged that C. Steven Bolen, FNN’s former chief financial officer who was fired last month over alleged financial improprieties, received $795,000 in unauthorized compensation payments. It was the first such disclosure of the amount Bolen allegedly misappropriated.
Phone calls to Bolen’s home were referred to his attorney, Howard Weitzman, who did not return calls seeking comment.
Alan J. Hirschfield and Allan R. Tessler, co-chief executives of FNN and Infotech, were appointed by the boards two weeks ago to consider selling some or all of Infotech’s operations, which include a cable network and ailing United Press International.
In an interview Wednesday, Hirschfield said parts of FNN and UPI might be sold separately. For example, he said buyers have expressed interest in FNN’s data services and UPI’s sports wire and Latin American news service.
Whatever the outcome, Hirschfield and Tessler will have to act quickly. They have requested a 90-day moratorium on all interest and lease payments, which the banks and lessors so far appear to have granted. But after that, many analysts believe that Infotech may be pressed into liquidation to pay off its obligations.
Hirschfield described FNN, Infotech’s core asset, as “still a very valuable franchise” and said the company is projecting a profit for the 1991 fiscal year.
Infotech, which owns 47% of FNN, is a holding company that owns stakes in 14 companies. Infotech also owns 97% of troubled UPI, which earlier this week told its 350 union employees that the news service will have to be liquidated unless they accept a 35% pay cut for 90 days.
Several major media companies are believed to be interested in FNN, a cable TV channel available in 35 million homes. Mark Reily, a partner in the New York investment firm MacDonald Grippo Reilly, estimates that FNN could bring between $150 million to $200 million if it were sold, a figure that Hirschfield did not dispute.
Analysts said a number of U.S. or international media giants could be considered likely buyers of FNN, including Time Warner Inc., Tele-Communications Inc., Turner Broadcasting System Inc., Viacom Inc. or Capital Cities/ABC Inc.
“The inquiries we have had for the companies are very serious and come from the highest level,” Hirschfield said. He added that more than 10 companies had expressed interest in FNN, UPI or other Infotech subsidiaries, including its 51% stake in the Learning Channel cable TV network.
FNN stock rose 75 cents Wednesday, closing at $3.25, on news the assets would be sold.
