Perelman Offers Deal to Marvel
Marvel Entertainment Group Inc. said financier Ronald Perelman offered to pay $350 million for new Marvel shares in a bid to keep the troubled comic book company from filing for bankruptcy.
Marvel’s stock tumbled because the plan from Perelman’s Andrews Group Inc. means issuing 410 million shares at 85 cents each. That would sharply cut the value of existing shares to about $1.30 each. The stock is collateral for $643 million in bonds.
“I don’t think Marvel will take the first offer and people may find it offensive. This was a very low blow,” said Phelps Hoyt, an analyst at KDP Investment Advisors.
Under the plan, Andrews would pay the $350 million in Toy Biz Inc. stock, cash or both. Andrews is in the process of purchasing 67% of Toy Biz; Marvel already owns 26%.
The move would make Toy Biz a unit of Marvel and provide Marvel with a source of cash as it struggles to reverse the declining popularity of its comic books and trading cards. Marvel is in violation of its debt covenants and today reported its fourth consecutive quarterly loss.
Marvel’s shares plunged $1.875 to close at $2.75 in trading of 3.24 million shares on the New York Stock Exchange, far more than the three-month daily average of 253,000. Meanwhile, Marvel’s zero-coupon bonds due in 1998 fell almost 75%, traders said.
