Metromedia International Group Response to Lens Investment Management
NEW YORK--(BUSINESS WIRE)--Nov. 14, 2000--Metromedia International Group, Inc. (AMEX:MMG - news), which through Metromedia International Telecommunications, Inc. (MITI), is the owner of various interests in communications joint ventures in Eastern Europe, the former Soviet Union and other emerging markets, today is making public its response to the letter dated September, 29, 2000 from Lens Investment Management, LLC. The following is an excerpt of the letter written by Stuart Subotnick, the President and Chief Executive Officer of Metromedia International Group, Inc.:
I will attempt to address your concerns in turn.
First, my partner John Kluge and I are MMG's largest
stockholders so we share your concern regarding MMG's
stock price. However, neither MMG nor its management team
can control what happens positively or negatively in the
capital markets and we do not manage businesses solely to
please the capital markets. We have run and will continue
to run MMG with a view to what is in the best interest of
all of its stockholders. In addition, our businesses and
operations are concentrated for the most part in Russia
and the republics of the former Soviet Union, areas of the
world in which almost all of the companies in the
comparison indices may have limited operations but none of
which match our concentration in those areas.
Unfortunately, as has been widely reported, these areas
have undergone considerable political and economic
turmoil, which has had an adverse effect on the capital
markets impression of the value of our Company.
On the other hand, while MMG's stock price has not performed well recently, we have made very significant accomplishments in the last five years, including:
- The disposition of our film and theater businesses (Orion and
Landmark) for approximately $650 million in cash;
- We acquired PLD Telekom with its Russian telecom properties,
successfully integrated their operations into ours and realized
approximately $20 million of cost synergies out of the combined
businesses;
- We successfully negotiated an amicable resolution of our
differences with China Unicom and successfully repaid MMG monies
it had advanced to those ventures;
- We successfully implemented, where necessary, management changes
to improve operating results.
Second, we understand that there have been some filings by
stockholders unhappy with the MMG stock performance.
Again, as the largest stockholders of MMG with a very
significant investment in MMG, we share your interest in
maximizing stockholder value and we are constantly
evaluating opportunities to maximize our assets. We will
not, however, manage our business and operations solely to
respond to the capital markets.
Next, we have already announced that Snapper is a non-core
asset and we will dispose of it under the proper
circumstances. It has been in a rebuilding process for a
number of years and as we have said in the past, we did
not think we could get a price for Snapper which was
reflective of its true value. We have always managed MMG's
assets with a view towards maximizing stockholder value
which is exactly why we sold Orion Pictures and the
Landmark Theater businesses when we did and both of those
transactions benefited greatly our stockholders as a
whole. We continue to examine all opportunities to
maximizing value to all of our stockholders, which is
again consistent with our position as the Company's
largest stockholders.
I also take issue with your characterization that
management is insulated and that we have poor investor
relations. We have held quarterly stockholder and analyst
meetings for the last year (four in a row) which have
dial-in information as well. We also tape these meetings
and copies of the sessions will be available to analysts
and stockholders. I am also keenly aware of the importance
of research analyst coverage; that being said, we cannot
force analysts to cover the Company and despite our
efforts to encourage them to do so (we have met with
numerous analysts over the years), none have elected to
commence research coverage. This is unfortunate and we
continue to work to encourage analysts to cover our
Company.
I also believe that we have a top-notch Board of
Directors. We have four very vibrant outside directors,
three of whom were or are CEOs of major public companies.
Their input is vital. Four of the ``inside'' directors are
employed by Metromedia Company which is MMG's largest
stockholder - we are not an entrenched management team
looking to protect our jobs but rather individuals whose
interests are exactly aligned with that of the
stockholders. In addition, one of our other directors is
employed by News Corporation, our second largest
stockholder. In short, you have a board with important
outside directors, other directors who represent the
Company's biggest and second biggest stockholders and only
one ``insider'' that runs the Company's largest operating
business. We think this is a Board whose interests are
aligned perfectly with the stockholders' interests. |
