TAFT <TFB> STOCK RISES ON PROPOSAL
Taft Broadcasting Co stock rose almost
three points today as its vice chairman and an investment group
proposed to sweeten a takeover offer for the company.
    However, several arbitragers said they would shy away from
the stock at its current price levels since it is unclear how
high bidding for the company would go and whether the company
would agree to a takeover.
    "There are too many uncertainties," said one arbitrager.
    Taft stock rose 2-7/8 to 155-3/4.
    Dudley Taft, Taft vice chairman, and Narragansett Capital
Inc said they sent a letter to the Taft board, stating they
were committed to pursuing acquisition of the broadcast company
and were prepared to negotiate a transaction in excess of 150
dlrs per share.
    The company responded that the proposal would be submitted
to the board of directors, but that no decisions have yet been
made on a sale of the company.
    "Someone's betting this company will go for 170 (dlrs per
share)," said one arbitrager.
    Arbitragers said the stock is a risky buy at current
levels, unless an offer was accepted in the 170 dlr per share
range. They said to make an arbitrage investment at this level
would be chancy since it will take a long time for any
transaction to be completed because of regulatory approvals
necessary for the broadcast properites.
    Taft earlier rejected a 145 dlr per share or 1.35 billion
dlr bid from the investment group. The company said it rejected
the bid as inadequate based on advice of Goldman, Sachs and Co,
its financial adviser. It said it would consider alternatives
such as restructuring.
    Arbitragers speculated a bidding war may erupt for Taft,
which has two large shareholders in an investment group led by
Robert Bass and Carl Lindner, chairman of American Financial
Corp. The Bass group holds 25 pct of Taft and Lindner holds
16.2 pct. The Taft family, which founded the company almost 50
years ago, has about 12 pct.
    Lindner last week told the Securities and Exchange
Commission he may be interested in making a bid for Taft.
    "I could see if things got really crazy that it might go
for 175 (dlrs per share)," said one arbitrager, but he
speculated it probably would not even be taken over for more
than a price in the 160s.
    Another speculated that Lindner might bid, but he
speculated the investor would not really be interested in
running the company. Lindner was unavailable for comment.
    Dennis McAlpine, an analyst with Oppenheimer and Co, said
he had speculated the company might be considering a leveraged
buyout.
    "Ideally, you'd have to break this thing up to satisfy all
the interests involved," he said, adding the two largest
shareholders might be interested in pieces of Taft.
    He said the highest takeover price he calculated for the
company has been about 140 dlrs per share, but that the highest
estimates on Wall Street have been about 160. He said the
latter would be based on more optimistic expectations for the
broadcast industry.
 Reuter
