Sugarman Boosts Bid for Media General by 14%

Boosting the ante for a newspaper-television empire by about $240 million, Hollywood television producer Burt Sugarman on Monday sweetened his merger offer for Media General by 14% to $70 a share, or nearly $2 billion. He said he might go higher still.

Sugarman, who began with a $61.50-a-share offer Feb. 29, has $100 million invested in the Richmond, Va.-based firm. He owns 10% of its shares through two Los Angeles companies, Giant Group Ltd. and Barris Industries, which he controls.

Media General is controlled by Chairman D. Tennant Bryan and his family, who have said they would not sell their stake “for any price.” That position has been cited by the company’s board as the reason for not taking the proposal under formal consideration.

The company made no immediate response to Sugarman’s latest move, which included an offer to open discussions that might result in his making an even higher bid. Before his Feb. 29 offer, the company’s stock traded at $43.875. It closed Monday at $49 a share, up $2.25, on the American Stock Exchange.

Sugarman’s latest bid came less than two weeks before Media General’s annual meeting scheduled for May 20. At that time, the company is to report the outcome of Sugarman’s proxy battle to win the three board seats elected by the firm’s Class A stock, which is publicly traded.

Some Wall Street analysts have made Sugarman a favorite to win all three seats. Sugarman’s fellow candidates for the positions are Harold C. Simmons, a Dallas financier with a reputation as a raider, and David Gotterer, a New York accountant who is vice chairman of Giant and Barris.

The Bryan family controls the other six seats through ownership of 71% of the company’s Class B stock, which carries superior voting power.

In a letter to Media General’s board making the higher offer, Sugarman said: “This amount may be increased further based upon discussions which we are prepared to have with company officials about the intrinsic value of Media General. If there are values in Media General not reflected by the public information, we are prepared to recognize those values by increasing our offer.”

The letter said the board has a fiduciary responsibility to the stockholders that includes proposals made by others, “rather than turning a deaf ear to every one.”

Sugarman went on to say that recent depositions have “exposed the fact that ours is not the first proposal” received by the company but not submitted to the board or stockholders for consideration.

“For example,” the letter said, “J. Stewart Bryan testified that over the years he has received proposals from such companies as Knight-Ridder, Times Mirror and Capital Cities, none of which was even brought to the Media General board for consideration.”

J. Stewart Bryan III is vice chairman and executive vice president of Media General and the son of D. Tennant Bryan.

Media General’s holdings include two daily newspapers, the Tampa (Fla.) Tribune and the Richmond Times-Dispatch & News; three television stations, and the 33 weekly Highlander and Golden West newspapers in Los Angeles and Orange counties.