Public Offering for Piece of MCA Explored : Entertainment: With the bidding hot for Paramount, Matsushita may be ready to sell off a minority stake.

Matsushita Electric Industrial Co. is exploring the possibility of a U.S. public offering for a minority stake in MCA Inc., which owns Universal Pictures and Universal Studios theme parks.

With entertainment company values surging amid the Paramount Communications Inc. takeover battle, sources said Matsushita could use the sale proceeds to recoup some of the $6.1 billion it paid for MCA in 1991.

The Japanese manufacturing giant has discussed several possible spinoff scenarios, sources said, including one in which MCA Chairman Lew R. Wasserman and President Sidney J. Sheinberg would acquire a combined 15% stake. Sources do not expect Matsushita to sell more than 20% to the public because of its desire to maintain control of MCA and because of potential tax consequences.

While Wasserman and Sheinberg are said to strongly favor such a move, sources stressed that Matsushita remains undecided and that many details would have to be worked out.

MCA declined to comment on the discussions Friday. In Osaka, Japan, where the weekend had already begun, Matsushita executives could not be reached.

Analysts said the timing is right for an offering, given Wall Street’s current fervor for entertainment company stocks. Paramount, which has fewer assets than MCA, has been bid up around $10 billion in the five-month battle between Viacom Inc. and QVC Network Inc. Analysts expect other deals to follow as the information superhighway creates new demand for programming.

“This is the perfect time for an (offering) and the best thing (Matsushita) could do, because you won’t see multiples this high for several years to come,” says Lisbeth R. Barron, an analyst with New York-based S.G. Warburg. “These stocks are trading at 14 to 15 times cash flow.”

Barron said she could not estimate what MCA is worth today because Matsushita does not break out separate asset values. However, one MCA insider recently valued the company at about $12 billion based on what Paramount is fetching.

After initially drawing criticism for their Hollywood forays, Matsushita and Sony Corp. are now credited with having made savvy investments.

Sony, which owns Sony Pictures Entertainment, has openly expressed interest recently in selling a piece of its studio to an outside investor, such as a cable or telephone company, as a way to capitalize on its holding. It has also considered a public offering.

Separately, Time Warner has already sold a 25.5% interest in its entertainment operations to US West for $2.5 billion, and a 12.5% interest to Japanese firms Toshiba and Itochu for $1 billion.

A Universal source suggested that while top management at MCA would like nothing better than to be spun off and is all for being part of a publicly traded company again, Matsushita “won’t do anything unless Sony sells first.”

Several months ago, rumors surfaced that Matsushita might sell part of MCA to cable titan John Malone of Tele-Communications Inc.

But that rumor subsided after TCI signed a $33-billion merger agreement with Bell Atlantic Corp. Matsushita also discussed selling a large piece of MCA to AT&T.;

Barron said a stock offering would be more likely for Matsushita because “they don’t want to have to deal with a partner in terms of decision making.”

With worldwide electronics sales in a slump, a public offering for MCA could be especially enticing for Matsushita. The entertainment giant is coming off a banner year in which it released “Jurassic Park,” which has grossed nearly $900 million internationally. It’s also behind “Schindler’s List,” considered the front-runner for best picture at the upcoming Academy Awards.

Matsushita reported a 32% drop in operating profit and a 10% drop in net sales for the second quarter ended Sept. 30, reflecting a general downturn in sales.