National Media: Despite Its Woes, Co. Seen As Valuable
Speculation about various companies being interested in National Media prompted heavy trading in the
stock last month. In March, some 8.7 million shares of NYSE-listed National Media changed hands,
compared with just 3 million shares in February.
''We kept rumors hearing about takeover offers, but nothing came of it,'' said McEvoy, the Janney
Montgomery Scott analyst. Among the companies rumored to be looking at National Media were Comcast
Corp. (CMCSA) and News Corp (NWS).
''I think at the right price, National Media would have been interested,'' McEvoy added.
In early March, after shares of National Media gained 20% in one day, Rauscher Pierce Refsnes analyst
Sutton put out a research note saying there was no fundamental reason and no more news to account for
the rise. After that, the analyst said, the takeover talk died down a bit.
Nevertheless, executives at National Media ''have been concerned for a while that they might get a
predatory buyer to come in and make an offer at levels they felt didn't truly reflect the company's value,''
Sutton said.
Asked about any offers the company may have received, Bruce Boyle, National Media's director of
investor relations, said: ''We can't comment on who we've talked to.'' He added, however, that there
have been no Securities and Exchange Commission filings by any entities, as required by law if a
company crosses the 5% ownership threshold in a publicly-traded firm.
Its recent difficulties aside, analysts agreed that a company as unique as National Media likely would
command a hefty premium.
Among the positives that observers cited were: National Media's ability to broadcast to hundreds of
millions of people; its production expertise; its fulfillment capabilities (i.e. being able to service orders
once received); the value of National Media's library of shows; and the company's rights to sell products
in certain retail chains.
''There's a lot of value you can derive from this business,'' said Sutton.
Clouding that view, however, is another revelation National Media made Monday. The company said it is
evaluating certain corporate acquisitions, the carrying value and amortization of production costs, the value
of certain inventories and receivables, and restructuring of operations.
''I think you're going to see quite a bit of write-offs related to assets they don't feel are fairly valued on
their balance sheet,'' said Sutton.
National Media executives confirmed that they do expect write-offs, but said the size of those write-offs
and any resulting losses are impossible to determine at this time.
''We plan to release more specific information as soon as we have something material to report,'' Boyle
said.
(END) DOW JONES NEWS 04-28-97
4:14 PM |
