Matsushita May Have MCA on the Block

Just when it looked as if things couldn’t get more tumultuous at MCA Inc., now come reports that parent Matsushita Electric Industrial may actively be looking to sell part, or even all, of its entertainment conglomerate.

The Wall Street Journal in Friday’s editions listed Seagram Co., Germany’s Bertelsmann, PolyGram and cable giant Tele-Communications Inc. as possible suitors for the company, which the Japanese electronics giant bought for $6.6 billion back in 1990.

None of the four companies would comment, and MCA only repeated a previous Matsushita statement that it is still pondering what to do about MCA. Previously, Matsushita has said it isn’t interested in selling.

Bertelsmann sources privately said that they haven’t held talks with MCA, a TCI executive called the reports speculative and a Seagram source also discounted them.

Of the four companies, Hollywood executives are most intrigued by the PolyGram scenario. PolyGram is controlled by the Dutch electronics giant Philips. One source close to Universal City-based MCA said PolyGram Chief Executive Alain Levy has held several MCA-related discussions with executives in recent weeks.

Another scenario making the rounds is that Fox Inc. owner Rupert Murdoch, probably the industry’s biggest risk taker, could pounce with his own offer.

Still, executives familiar with MCA expressed doubts that a sale of the entire company is near. Working against the sale of the whole company is the strength of the Japanese yen. Matsushita presumably would have to demand a hefty premium over what it paid for MCA in the first place. More likely, they say, would be a strategic alliance with a company such as PolyGram, which would allow Matsushita to recoup some of its investment while keeping its strategic ties to entertainment.

PolyGram is already a power in the music business with such record labels as A&M;, Motown and Island. The company has been looking to build its movie business, and has said it will eventually establish its own distribution system.

PolyGram has a joint venture with MCA’s Universal Pictures unit in Gramercy Pictures, which released “Four Weddings and a Funeral.”

Matsushita has previously held talks about selling a portion of the company. Last fall, the company hired entertainment investment banker Allen & Co. to look at possible scenarios. Creative Artists Agency Chairman Michael S. Ovitz is advising as well.

Matsushita has been at odds with MCA’s two top executives, Chairman Lew Wasserman and President Sidney J. Sheinberg, over strategic issues. Indeed, executives suggested that frustration with the rift may be the reason Matsushita is entertaining such a wide range of possibilities for MCA.

Senior MCA executives said whatever talks are going on are likely to involve executives at the highest of levels at Osaka-based Matsushita.

Times staff writer Chuck Philips contributed to this story.