NEW YORK --- All American Communications, the syndie behind "Baywatch," put itself on the market Monday with an asking price believed to be close to $600 million.
The syndie revealed in a statement that it was in "preliminary discussions" with outsiders "about a possible sale of the company" and had hired investment banks Goldman Sachs & Co. and Media Finance Inc. to advise on a potential deal. It gave no other details and a spokesman declined further comment.
Goldman Sachs has circulated an information book on All American over the past few weeks to interested companies, Wall Street sources said. The list of potential buyers includes Sony, Universal, Metro-Goldwyn-Mayer and Britain's Pearson.
But All American's chairman/CEO Anthony Scotti's asking price is a little steep, say people who have looked at the company. Given the syndie's debt of $174 million, the $600 million price translates to $32 a share --- compared with the price of $17.50 last Wednesday before talk of Goldman Sachs' hiring began to circulate.
Stock soars
Word of the upcoming deal prompted All American's stock price to rocket 29% Thursday and Friday to close at $22.62 although it dropped 12¢ back to $22.50 Monday. Oppenheimer analyst Alan Gould downgraded the stock Monday night, saying he values it at $25.50 a share.
Industry execs and investment bankers who have looked at All American said the company is not that attractive because its major asset is "Baywatch," which is sold well into the future.
For potential buyers, the long-term sales deals already struck on the series limit the ability to increase the company's earnings, industry execs said.
On the other hand, Oppenheimer & Co. analyst Alan Gould argues All American's most valuable business is its international distribution arm Fremantle, which he says it is worth $200 million.
All American's other main division is Mark Goodson Prods., which owns many famous gameshow formats, although people who have looked at the company say it is hard to value this business because of the uncertainty of launching new gameshows.
All American earned $12.6 million in net profit in 1996, up sharply from $7.2 million a year before. Earnings before interest, taxes and amortization were $40.1 million, which puts a multiple of about 15 on Scotti's asking price, compared with a multiple of nine that Gould puts on the company.
Scotti, who controls a 42% voting stake in All American, is known to have been frustrated for some time at the difficulty he was having in launching new shows into syndication. Scotti is even believed to have considered buying TV station groups to improve his bargaining leverage but couldn't put together the right deal.
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