Evening News Assn., the Detroit media company that is the subject of a hostile takeover bid from Hollywood executives Norman Lear and A. Jerrold Perenchio, is expected to announce today that it has received potentially higher offers from friendlier suitors.
Investment bankers speculated that the announcement will be designed to dissuade shareholders from tendering any of their stock to Lear and Perenchio, whose tender offer for Evening News shares ends Friday.
The announcement could set off the bidding war for the company that analysts have expected since Lear and Perenchio offered to buy the company for $1,000 a share in late July. Lear and Perenchio later raised their bid to $1,250, or $566 million.
The company, which owns the Detroit News, two television stations, two radio stations and a group of small daily and weekly newspapers, is one of the last major newspaper companies in the country still largely family owned.
Many family members, however, are believed to be unhappy with Evening News' financial performance. Due largely to losses from the Detroit News, which is locked in a tight circulation war with the rival Free Press, the company posted an after-tax profit margin last year of just 4%.
Sought Other Offers
Once Lear and Perenchio made their unsolicited tender offer in July, Evening News management asked Salomon Bros., its investment banking firm, to solicit other offers, in part to seek a more friendly suitor.
Among those believed to have made presentations to Evening News management Wednesday are Gannett, publisher of USA Today and operator of the nation's largest chain of newspapers, and Jack Kent Cooke, owner of the Washington Redskins football team.
Gannett Chairman Allen Neuharth was in Detroit on Wednesday, but Gannett has refused to comment on reports that it has offered to buy Evening News.
Cooke, who also was in Detroit, similarly has refused to comment.
New York Times Co. also reportedly was among the suitors, but spokesman Leonard Harris categorically denied the report Wednesday.
Talk of the impending offers was sufficient earlier this week to cause one investment banker representing a group of dissident shareholders to send mailgrams to his clients recommending that they not tender their shares to Lear and Perenchio.
Porter Bibb, whose investment firm, Ladenburg, Thalmann & Co., was hired to solicit a buyer for a shareholder group representing about 25% of Evening News' stock, said he sent the mailgrams after being told by Salomon Bros. that three media companies would present offers Wednesday, all of them equal to or higher than Lear and Perenchio's.
Bibb said Salomon Bros. has distributed a prospectus about the company to various media firms soliciting bids for Evening News after Lear and Perenchio launched their tender offer. He said he understands that the offers made Wednesday did not include precise financial bids but only "value ranges."
More concrete offers are expected after the bidders receive detailed financial data from the company, Bibb said.