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New World Raises Offer to Acquire Kenner Parker

August 20, 1987|KEITH BRADSHER | Times Staff Writer

New World Entertainment, foiled in its $41-a-share takeover bid for the nation's third-largest toy maker, on Wednesday raised its offer for Kenner Parker Toys to $47 a share.

Investors almost immediately put an even higher value on the company. Kenner Parker's stock closed Wednesday on the New York Stock Exchange at $49.50 a share, up $2.25 from Tuesday.

Kenner Parker's chief financial officer, G. Neal Ryland, declined to comment on New World's latest bid. The Beverly, Mass.-based company said Tuesday that it is considering such takeover alternatives as a corporate restructuring, a friendly merger with another company or a leveraged buyout.

The sweetened offer will make it much more difficult, although not impossible, for the maker of Play-Doh and Monopoly to find an alternative, said David Leibowitz, a senior vice president of American Securities, a New York investment banking firm.

"It's one thing to compete against a $41 price tag, it's quite another thing to compete against a $47 price tag," he said. "The new bid has certainly put to rest the thought that New World was not serious on consummating a transaction. Clearly they are."

New World, whose Marvel Entertainment subsidiary publishes comic books with such characters as Spiderman and the villainous Dr. Doom, is a Los Angeles-based film and television production company.

Kenner Parker, with earnings of $16.0 million in 1986 on sales of $502.8 million, makes such games as Risk, Sorry! and Monopoly and such toys as Nerf balls and Play-Doh. Kenner Parker is also the leading printer of play money. The company said that in one year recently the U.S. Treasury printed $35 billion in currency, while $56 billion worth of Monopoly money was printed.

In its new offer, New World would pay a total of $512 million for Kenner Parker securities it does not already own. New World's offer expires Sept. 10, but the company has indicated that it may be renewed.

Lawyers for Kenner Parker and New World continue to file documents in Massachusetts Superior Court regarding Kenner Parker's request for a preliminary injunction against a takeover. The toy company, spun off by General Mills in 1985, has built its legal defense on a little-used state law barring those who buy more than 5% of a company's stock without notifying management from launching a hostile takeover in the following year.

No decision is expected in the case until at least Friday, and probably not before next week, a lawyer for New World said.

New World--not including Marvel, which was acquired Dec. 29--had net income last year of $10.7 million on sales of $188.9 million. With Marvel's sales and losses included, New World had profits of $8.2 million on sales of $302.8 million.

New World has said previously that a merger with Kenner would allow the production of toys based on Marvel comic book characters, such as Spiderman and Incredible Hulk. New World also would win the rights to new material for its cartoon shows and comic books.

Alluding to Kenner Parker's board game, Clue, Leibowitz said that if New World is successful, comic book readers might someday see "Colonel Mustard with a knife."

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