Offer branded neither "fair nor reasonable"

SYDNEY– Kerry Packer almost certainly will have to dig deeper into his corporate coffers if he wants to control Hoyts Cinemas after an independent report commissioned by Hoyts branded the takeover offer as neither “fair nor reasonable.”

Via his privately-held Consolidated Press Holdings, the media titan is offering $A2 ($1.26) a share for the exhib, valuing Hoyts at $384 million, and has already acquired options worth 17.13% (Daily Variety, March 25).

Hoyts released late Wednesday a report by merchant bank N. M. Rothschild & Sons which assessed Hoyts’ value as at least 16% higher than CPH’s offer and noted its shares have been consistently trading above $1.26 since the bid was lodged.

The Hoyts board is expected to formally respond to Packer’s offer next Monday when it lodges a Part B statement to the Australian Stock Exchange.

After disclosing its bid, CPH deputy CEO Ashok Jacob ruled out the prospect of increasing its offer price and indicated that, if it did not succeed, “we’re going to be long-term, patient investors.”

Rothschild’s report values Hoyts in the range of $420 million to $471 million.

Hoyts’ 965-screen U.S. loop is worth $232 million to $248 million.

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