ENTERTAINMENT MARKETING TOPS CRAZY EDDIE OFFER
A quickly growing Texas-based
distributor of electronics products offered 240 mln dlrs
for Crazy Eddie Inc <crzy>, the leading New York City
electronics retailer, or one dlr per share more than its
founder has bid.
    The 8-dlr-a-share offer by Entertainment Marketing Inc <em>
for Crazy Eddie comes less than two weeks after founder Eddie
Antar and a firm controlled by the Belzbergs of Canada
announced a bid to take the 32-store Crazy Eddie chain private.
    Analysts said Entertainment Marketing, whose revenues and
profits quadrupled in 1986, may be looking to break into the
highly competitive New York City retail market for consumer
electronics, the nation's biggest, at a time the fortunes of
electronics retailers have sagged.
    The analysts questioned whether Houston-based Entertainment
Marketing, founded by a former electronics retailer but whose
present buinesses are primarily as wholesale distributors, had
the management expertise for retailing or was merely trying to
drive up the price of the Crazy Eddie shares it already owns.
    "I have mixed feelings," said analyst Dennis Telzrow of
Eppler, Geurin and Turner, a Dallas brokerage. "On the one hand
it's probably a cheap price. On the other hand, does
Entertainment Marketing have the management talent to run it
and will the Crazy Eddie people leave?"
    "It's a risky strategy for Entertainment Marketing," said
analyst Eliot Laurence of Wessels Arnold and Henderson, a
Minneapolis brokerage. "Electronics retailing is very management
concentrated; they'd want to keep Crazy Eddie's management in
place."
    Laurence said that, since Entertainment Marketing already
owns 4.3 percent of Crazy Eddie's 31.3 million shares, it may
be trying to get the Antar-Belzberg group to increase its
7-dlr-a-share offer.
    Shares of Crazy Eddie, which have jumped from the high
4-dlr range to above 7 dlrs since the Antar-Belzberg bid was
announced May 20, rose another 50 cents Monday to 8.375 a share
in over-the- counter trading. 
    Antar, the reclusive founder of the chain in the New York
City, Philadelphia and Connecticut areas, said last month that
his group controlled 14 percent of Crazy Eddie's shares.
    A Crazy Eddie spokesman said the company's board has taken
no decision on the Antar-Belzberg offer, worth some 187 mln dlrs
since they own more shares than Entertainment Marketing. He
would not comment on the new offer.
    Entertainment Marketing sells computer products such as
disk drives and other, often discounted electronics goods to
retailers, primarily in the southwest, and directly to
consumers by cable television.
    In fiscal 1986, ending last January, its revenues rose to
87.9 mln dlrs from 21.3 mln dlrs the previous year. Net profit
went to 3.2 mln dlrs from 750,000 dlrs in 1985.
    Entertainment Marketing, whose chief executive officer,
Elias Zinn, once ran an electronics retailing business, said in
a statement it had committed 50 mln dlrs toward the purchase
of Crazy Eddie and had retained Dean Witter Reynolds Inc to
assist in financing the balance.
    Analyst Telzerow estimated that the company would have to
borrow about 100 mln dlrs to complete the proposed buyout since
Crazy Eddie has cash and other assets worth about the same
amount.
    Shares of Entertainment Marketing were up 12.5 cents Monday
to 9.50.
 Reuter
