Golden Books stox dives as Gabelli lowers stake

Publishers losing interest in company

NEW YORK — The stock of Golden Books Family Entertainment dipped below 30¢ a share Thursday as a filing with the Securities and Exchange Commission revealed that prominent media investor Mario Gabelli had unloaded a portion of his 5% stake.

Meanwhile, the beleaguered children’s publisher saw its prospects for finding a buyer dimmed by a lack of interest from logical candidates.

Lynn Gardner, a spokesperson of Scholastic Inc., another New York-based children’s publisher, told Daily Variety: “To the best of my knowledge, we are not interested in buying Golden Books.”

Peter Olson, the chairman and chief executive of the newly combined Random House Inc., said the same thing but added: “If there are interesting children’s book licensing that became available, we might be interested in acquiring them.”

The lack of interest by Random House, acquired earlier this year by Bertelsmann, is noteworthy for two reasons: Its German parent company is known to be the world’s most dedicated book publishers; and, with 15% of the U.S. book market, Random House is itself an established children’s book publisher.

In its SEC filing, the group headed by Gabelli reported that it sold 337,800 shares between Sept. 11 and 21 at prices between 31¢ and $1.42 per share. Those sales leave the group with 1.5 million Golden Book shares, or 5.48% of the total outstanding.

By selling so low, Gabelli would appear to be giving up on a white knight’s rescuing Golden Books, which barely two years ago was deemed an easy turn-around that was supposed to have been engineered by ousted Simon & Schuster chief Dick Snyder.

Snyder installed himself as CEO after he and his investment partners, Barry Diller and Warburg Pincus Ventures, paid $65 million to acquire 37% of the company in May 1996.

Golden Book shares, which traded in excess of $12 in the past year, fell from nearly $2 just this month.

As an operating company, the publisher continues to project a business-as-usual attitude. Just this week, for example, it announced a deal with Varga tvc Ltd., a U.K. animation studio, to produce videos for such Golden classic characters as the Poky Little Puppy, Saggy Baggy Elephant and Scuffy the Tugboat.

President Eric Ellenbogen said the deal “was in the business plan,” which, he explained, was to “take the most famous children’s stories off the page and put them in videos.”

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