MCA May Be Near Merger Agreement With Matsushita

MCA Inc.’s directors appeared poised to approve their company’s sale to Matsushita Electric Industrial Co., but were still meeting to consider the transaction as of Sunday night.

One person close to the companies said a deal appeared “imminent.” But an announcement of any sale remained unlikely before Monday at the earliest, since the companies haven’t concluded formal negotiations, and because any agreement still would have to go before Matsushita’s board in Osaka, Japan.

MCA’s 11-member board met all day in New York to consider the buyout and was scheduled to resume meetings Sunday night after a dinner break.

Several people close to the talks said the companies didn’t have a tentative agreement on which MCA’s board could take firm action. It appeared more likely that directors of the Hollywood company were conducting a thorough review of progress in the bargaining, which for the last week has been conducted in New York between top officers of the two companies.

The companies apparently have narrowed their differences over price in recent days, but remained apart on some issues and continued negotiating through Saturday night and into Sunday morning.

Earlier in the week, Matsushita was said to be offering a deal under which MCA holders would receive about $70 a share, while MCA officers were holding out for at least $75 a share, including the value of stock in a new spin-off that would own MCA’s New York-area television station. Stock in the spin-off is said to be worth about $5 a share.

A deal at a composite $75 a share would represent a value of about $7.79 billion for the company, which has major interests in film and TV production, records, theaters, broadcasting, books, theme parks and other businesses.

MCA had apparently hoped to get as much as $90 a share for its stock, but proved willing to deal in a much lower range when Matsushita representatives took a tough stance on price and it became clear that softening world financial markets were unlikely to support a higher bid. As of Saturday, the companies were said to be about $3 apart on price, but their precise bargaining positions weren’t known.

An MCA spokeswoman declined to comment on the board meeting, and representatives of both companies have declined to discuss the negotiations.