Marvel gains credit

Move backs proposed Harvey buyout

By RICHARD MORGAN

NEW YORK -- Marvel Enterprises secured a $60 million credit line from Citibank last week, rendering its rumored interest in taking over troubled licensing firm Harvey Entertainment a more realistic proposition.

The credit line, complemented by a $250 million debt offering completed just five weeks ago, prompted Marvel president and CEO Eric Ellenbogen to comment, "We have now finalized our capital structure and are fully poised to implement our business plan."

The company used much of its debt proceeds to pay off a $185 million bridge loan incurred when Toy Biz acquired a bankrupt Marvel Entertainment Group and then combined operations under the name of Marvel Enterprises.

Harvey's business now centers on managing 3,500 proprietary characters, which the company uses in comic books and toys as well as licenses to everything from snacks to films.

Last month, for example, Marvel announced the launch of the filmed entertainment franchise of its Spider-Man character in partnership with Sony Pictures Entertainment after years of legal snags.

Good match

Since emerging from bankruptcy, Marvel has been considered a good match for the still-ailing Harvey, owner of such animated classics as Richie Rich and Casper the Friendly Ghost.

Harvey's availability for some such hook-up has been apparent since the Los Angeles-based company retained New York investment firm Donaldson, Lufkin & Jenrette seven months ago.

Last month, while the stock of Harvey continued to languish, its deposed CEO Jeff Montgomery tendered an offer that would essentially convert the company's equity to debt and, were a turnaround orchestrated within three years, provide warrants to return controlling interest back to shareholders.

The bid brought out several other prospective buyers, but none so far have been willing to offer the $10 a share that Wall Street deems necessary for a successful takeover.

At that figure, though, the company could be had for $40 million -- an amount now within Marvel's reach.

But when asked if that's how Marvel planned to use its resources, a rep declined comment.