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KERKORIAN'S COLUMBIA STOCK PURCHASE ATTEMPT SUCCESSFUL By RON SCHAUMBURG NEW YORK—Financier Kirk Kerkorian, who controls 47 peicent of the stock in Metro-Goldwyn-Mayer, was successful in his tender offer to purchase approximately 20 percent of the stock in Columbia Pictures Industries Corp., it was announced by his lawyer Stephen D. Silbert. Kerkorian purchased between 2.0 and 2.25 million shares at $24 each. His original offer was to buy 1.75 million shares. Kerkorian said the purchase was for investment purposes only that he did not plan to control the studio. Justice Department Intervened The Justice Department tried to prevent the transaction because of Kerkorian's involvement in two major film companies, but a Federal District Court judge in Los Angeles, A. Andrew Hauk, refused to issue a temporary restraining order. He also refused to issue a preliminary injunction, which would have enjoined Kerkorian from completing the transaction pending a trial on the Federal antitrust suit initiated by the government. The executive committee of the National Assn. of Theatre Owners (NATO) met Jan. 1 1 and. among other business, adopted a resolution the sale (see opposing accompanying story). The resolution expressed the that the transaction would lessen competition between the two companies, belief MOM and Columbia, which in turn would result in decreased film production. GCC Made Similar Offer General Cinema Corp., owner of the nation's largest chain of theatres, had made an offer similar to Kerkorian's, but withdrew when Columbia's board of directors said it would not recommend the move to its shareholders. CPl's president and chief executive officer Francis T. Vincent Jr. said, "The GCC proposal as presented would create legal, business, economic and operational problems for us. Based on legal advice and after giving consideration to relevant business and economic factors, we could not recommend the GCC proposal to our shareholders." Judge Allows Sale In making his decision to refuse to block the sale. Judge Hauk, whose controversial decisions have often been challenged, said the government had failed to prove it would suffer "irreparable injury" if the order were not issued. He indicated that the government, if it won its suit, could seek to force Kerkorian to divest himself of the Columbia shares. Published weekly, except one issue at year-end, by Vance I'ublishing Corp., 825 Van Brunt Blvd., Kaasas City. Missouri C4124, Subscription rates: Sectional Edition, $15.00 per year, foreign. $25.00. National Executive Edition: $25.00, foreign, $30.00. Single copy, 75c. Second class postage paid at Kansas City. Mo. BOXOFKR'E I'ublicition No. (USPS 0B2-'2Cn). BOXOFFICE :: January A spokesman for the General Cinema Corp. declined to state whether government intervention might spur GCC into resubmitting its offer if Kerkorian loses the suit. Karen Libbett, director of public relations for NATO, expressed the possibility that Kerkorian "could make MGM totally a hotels and gambling company," contributing to the already problematic decline in available film product. Seen as Antitrust Case The Justice Department's antitrust division acts when mergers involve companies who control 5 percent or more of the market. According to NATO figures, MGM, whose films are distributed by United Artists, controls over 10 percent of the market, while Columbia's share of the market is "at least" 11 percent. Justice Department figures, however, indicated that Columbia's market share from 1972 to 1978 varied from 5.5 to 14.8 percent and averaged 10.3 percent, whereas MGM's share ranged for 0.8 to 11.2 percent, for an average of 3.5 percent. The figures depend on the number of hit films a studio releases. Off MGIVI Board of Directors Kerkorian's public relations company issued a statement saying that the Justice Depariment had told the financier's lawyers that the tender offer "does not violate the government's published antitrust guidelines." Those guidelines were established for industries which are not highly concentrated, unlike the film trade, which is highly concentrated. An antitrust official stated that the Justice Department can always bring antitrust suits for reasons "other than apparent market shares." In a separate action, the board of directors of MGM, for the first time since 1969, refused Kerkorian a seat on the board. He was prevented from assuming the position by an MGM bylaw precluding substantial stockholders in other film companies from holding a director's seat. NATO's Resolution Opposes Stock Sale NEW YORK — The text of NATO's resolution opposing the sale of Columbia stock to Kirk Kerkorian is as follows: On Jan. 16, 1979, Mr. Kirk Kerkorian, the controlling stockholder of Metro-Goldwyn-Mayer, Inc., will seek to complete the purchase of more than 25 percent of the voting stock of Columbia Pictures Industries, Inc. MGM is one of the nation's leading motion picture producers. MGM's films, which are distributed by United Artists, also constitute a significant share of the motion picture distribution business, with United Artists and MGM, according to published sources, controlling over 10 percent of that business. Columbia is one of the nation's leading motion picture producers and one of the nation's leading motion picture distributors, with, according to published sources, a market share of at least 11 percent of the motion picture distribution business. Because of the serious implications of this proposed stock purchase for the competitive structure and operations of the motion picture business generally, the executive committee of the National Assn. of Theatre Owners, Inc., adopts the following resolution: WHEREAS, motion picture distribution is already a highly concentrated business, with the top eight firms, including Columbia, controlling over 90 percent of the motion picture distribution business in the United States; WHEREAS, distribution of MGM-produced pictures also constitutes a substantial share of the motion picture distribution business; WHEREAS, MGM is a potential entrant into the motion picture distribution busi- (Continued on page 7) Managing Editor Ralph M. Delmont Dies KANSAS CITY—Ralph Delmont, 58, managing editor of BOXOFFICE since March, 1977, died Jan. 16 at St. Luke's Hospital. He had suffered a major heart attack Dec. 31, 1978, and had been in intensive care in the Independence Sasitariuni and Hospital since then. Delmont began at BOXOFFICE as a regional editor in August 1969. He succeeded Jesse Shlyen, brother of the magazine's founder and publisher Ben Shlyen, as managing editor nine years later. Bom in Harrisonville, Mo.. Delmont served in the Army as secretary to Gen. George S. Patton. Prior to coming to BOXOFFICE, he worked with an accounting firm in Chicago. Services were conducted Jan. 18 at Speaks Chapel in Independence. In lieu of flowers, the family has requested that a contribution be made to the Heart Assn.