Tuesday, June 24, 2008

Fisher shares jump on news of spurned takeover bid

Seattle Times staff and Bloomberg News

Shares of Fisher Communications rose almost 10 percent after the Seattle-based owner of radio and television stations disclosed an unsolicited takeover offer.

The board rejected the $43- to $45-a-share cash bid from an unidentified "financial" buyer in April after its board unanimously concluded it wasn't in the best interest of shareholders, Fisher said Monday in a statement.

The offer was as much as 41 percent more than Fisher's $31.86 closing price June 20. In April, the stock's highest closing price was $32.76.

Fisher shares jumped $3.05, or 9.6 percent, Monday to close at $34.91, for its biggest gain since Nov. 1, 2001. The shares have fallen 8 percent this year.

The company disclosed the offer after its third-largest shareholder, TowerView, said in a filing with the Securities and Exchange Commission earlier Monday that it had heard of the proposal and the board's rejection.

The New York-based investment firm said it owns 9.5 percent of Fisher's shares and disclosed the bid because it "does not wish to have any constraints on its ability to trade" the stock.

The offer valued Fisher at as much as $393 million, based on shares outstanding as of May 1.

Fisher, whose flagship properties are Seattle's KOMO TV and radio, said last month it may sell its Fisher Plaza development, an office and data-center complex that houses company headquarters and its local radio and TV stations.

The company also has been feuding with its largest shareholder, a group of funds controlled by Mario Gabelli that owns about 19 percent of Fisher, according to a June 20 regulatory filing.

Fisher is to receive approximately $157 million when its 2.3 million shares in Safeco are purchased in Liberty Mutual Group's buyout of the Seattle insurer.

Gabelli has urged the money be spent on a share repurchase, "as a way to enhance the intrinsic value of the remaining Fisher shares with less risk and more certainty than your pursuit of acquisitions."

But in an April 24 letter to Fisher Chief Executive Colleen B. Brown, Gabelli complained that "our suggestion was dismissed."

Copyright © 2008 The Seattle Times Company

When KPLZ became Star 101.5, was that because Fisher bought that station from Golden West?  Was that the reason for the shift from Top 40 CHR to their present format?

Fisher told to start seeking offers
Letter criticizes rejection of bid
By BILL VIRGIN
SEATTLE P-I REPORTER
June 25

A New York-based hedge fund management company has sent a letter to Fisher Communications Inc. telling the Seattle-based broadcasting company: Start talking to people who want to buy the business.

In a letter it released publicly Tuesday, FrontFour Capital Group LLC criticized Fisher management for turning down a bid from an undisclosed potential acquirer that had offered $43 to $45 a share.

Fisher disclosed the bid, made in April, in a release Monday, but it didn't name the bidder and said the board had rejected the unsolicited offer as not being in the best interest of shareholders.

That was not welcome news to investors who have chafed over Fisher's financial performance in recent years.

Even with a rise following Fisher's disclosure, the stock closed in trading Tuesday at $35 a share. It had been trading as high as $50 a share in 2007 before slumping late in the year.

FrontFour said Fisher's board and management had "failed to create shareholder value over the past two and a half years," and had spent $100 million "on acquisitions that have added limited to no value." Fisher's TV stations have cash flow margins below management's own targets and below other broadcast companies' margins.

"Management has been given more than sufficient time to improve shareholder value, but has been unsuccessful in its efforts," the letter added.

Fisher should suspend making any more acquisitions and hire an investment adviser to find a buyer, FrontFour added. If there's no deal, Fisher should look at ways to return cash to shareholders. (Fisher owns a small stake in Seattle-based insurer Safeco, so it will be getting money when that company completes its planned sale.)

FrontFour also said it will consider such measures as calling a special shareholders meeting or running a proxy contest at next year's annual meeting to prompt the company to act.

A spokesman for Fisher declined comment on the letter. FrontFour executives also weren't available for comment Tuesday.

Fisher's Seattle broadcast properties include KOMO-TV and radio stations KOMO-AM/1000, KVI-AM/570 and KPLZ-FM/101.5.

P-I reporter Bill Virgin can be reached at 206-448-8319 or billvirgin@seattlepi.com.