Interior Secretary Puts New Wrinkle in MCA Deal : Parks: Manuel Lujan Jr. has no authority to stop the sale, but the review of Yosemite National Park’s concession he ordered could be time-consuming.
In a surprise move that could complicate Matsushita Electric Industrial Co.’s purchase of MCA Inc., Secretary of the Interior Manuel Lujan Jr. has ordered a thorough review of the implications for an MCA subsidiary that operates tourist facilities in Yosemite National Park.
Lujan’s order concerns Yosemite Park & Curry Co. MCA and Matsushita have said they would put the company in escrow until it could be sold to an American buyer, but Lujan has pressed them to donate the concession to the National Park Service.
Tom Wilson, a department spokesman, said the secretary is withholding approval of the escrow arrangement to ensure that the interests of “the public and the park” are protected.
MCA and Matsushita had hoped to close the deal as early as this week, pending various regulatory approvals. It wasn’t immediately clear if the closing would be postponed.
Wilson gave no timetable for the Interior Department review but hinted that it may go slowly. “That’s up to the lawyers,” he said. “But they’re not noted for speed. We hope they will be thorough.”
Although Lujan has no authority to stop the $6.59-billion sale, which is scheduled to close Dec. 28., it would be politically embarrassing for MCA to turn over the Yosemite concession--valued $100 million to $200 million--to the Japanese without his approval.
MCA Chairman Lew R. Wasserman and Matsushita Executive Vice President Masahiko Hirata rebuffed Lujan earlier this month when he formally requested that they bequeath Curry “to the American people.” But both corporations are sensitive to the fallout that could result from a company based on National Park Service land falling into Japanese hands. Matsushita has pledged to find an American buyer for Curry Co. within a year.
Under the escrow arrangement, Curry Co. profits will be donated to the National Park Foundation, a private group that provides financial support for the park service, until a buyer is found.
MCA President Sidney J. Sheinberg said: “We are in discussions with the park service concerning Yosemite and are attempting to work out all aspects of the transaction in good faith.” An MCA spokeswoman declined to say whether Lujan’s review might delay the closing of the deal.
Matsushita had no comment on Lujan’s move, though the company was said to remain confident that the deal will close by early January. People close to the deal said MCA, whose holdings include Universal Pictures and the two Universal Studios theme parks, prefers to complete the sale as quickly as possible to avoid uncertainties, such as the possibility of war in the Middle East. Matsushita has contractually agreed that it won’t drop the deal if war breaks out in the Persian Gulf, however.
The disposition of Curry Co. appears to be one of three hurdles facing MCA and Matsushita, Japan’s largest electronics firm. The two companies are awaiting Federal Communications Commission approval for a plan to spin off WWOR-TV to MCA stockholders. (Federal law prohibits foreign entities from owning more than 25% of a U.S. television station.) MCA is also trying to dispense with the last of several class-action suits filed in opposition to the sale. The case, brought by shareholder Lawrence Epstein, is tentatively scheduled for a federal court hearing next Friday.
Jeffrey Logsdon, an entertainment industry analyst with the Los Angeles brokerage Seidler Amdec Securities, said it’s doubtful the Curry Co. issue will significantly impact the deal.
“I would find it very hard to believe this would be a deal breaker,” Logsdon said. “But it’s not surprising that outside interests would like to apply some leverage to see the outcome that would suit them best, be it the government or anyone else.”
Asked if Lujan’s review was a thinly veiled effort to win the park concession business for the government, his spokesman, Wilson, replied: “People can analyze it any way they want.”
