Investor Sells Stake in TV Production Company to Australian Network
BEVERLY HILLS, Calif. (AP) _ Investor Burt Sugarman has sold his controlling interest in the Barris Industries Inc. television production firm to the owners of an Australian TV network for $34.5 million, it was announced Friday.
Analysts suggested that Sugarman had temporarily abandoned hopes of assembling a multimedia company after being thwarted in a hostile takeover bid last year for Media General Inc., the Richmond, Va.-based newspaper and television chain.
There also have been numerous reports Sugarman had a falling out with producers Peter Guber and Jon Peters, who he brought on board to change the face of the company whose best-known products were ″The Gong Show″ and ″The Newlywed Game.″ Guber and Peters were executive producers of the Oscar- winning ″Rain Man.″
The 24.4 percent stake in Barris, the largest stake by far in the company, was held by Sugarman-controlled Giant Group Ltd., a cement and newsprint company. Giant’s 2.6 million shares were sold to Westfield Capital Corp. Ltd. and Northern Star Holdings Ltd., owners of Network 10, one of Australia’s three big TV networks.
A terse Giant Group announcement didn’t give the per-share price of the transaction, but given the total price of $34.5 million, it works out to $13.27 a share.
Sugarman employees refused to elaborate.
The investor, who recently married Mary Hart, hostess of the celebrity news show Entertainment Tonight, made several moves toward a higher profile for Barris. In July, Sugarman announced an agreement to buy the MGM studio name from MGM-UA Communications Co.’s controlling shareholder Kirk Kerkorian, but the deal fell through just two weeks later.
Sugarman’s abortive raid on Media General left Giant Group with $44 million cash and control of a plant in Pomona, Calif., that recycles newsprint. Giant makes cement and cement products.
When Sugarman bought into Barris in 1986, the company had $90 million to $100 million cash.
Analyst Stephen Weinress, who follows Giant Group for the L.H. Friend & Co. securities firm in Los Angeles, said it appeared he intended to use Barris money and assets to put together a media company embracing newspapers, television and movies.
″When he first bought into Barris he looked at it as a vehicle to expand into the entertainment industry,″ Weinress said.
With that possibility closed, it made little sense to hold onto Barris, said Jeffrey Logsdon, who follows Barris for Los Angeles investment firm Crowell, Weedon & Co.
″If what you really wanted was to go after Media General and you failed, why hang onto Barris,″ Logsdon asked.
Rumored differences between Sugarman and the Guber-Peters team likely figured in the decision, said Alex Ben Block, publisher of the Hollywood business newsletter Showbiz News.
Assuming the Australian buyers are willing to finance movie production, Barris could yet emerge as an independent producer of movies, Block said. And the network Down Under would provide a ready market for its TV shows, he added.