Times Mirror expands Waverly Inc. holdings

October 22, 1994|By Kim Clark | Kim Clark,Sun Staff Writer

The Times Mirror Co. has accumulated more than 5 percent of the stock of Waverly Inc., a Baltimore-based publisher of medical journals and books, according to a filing yesterday with the Securities and Exchange Commission.

The Los Angeles-based media giant, which owns several newspapers, including the Los Angeles Times, The Sun and The Evening Sun, disclosed that it owns 218,500 Waverly shares "for investment purposes." That position, however, was "subject to change at any time," the filing said.

In addition to newspapers, Times Mirror, with revenues of $3.7 billion last year, is one of the nation's biggest medical publishers. Mosby-Year Book Inc., one of Times Mirror's divisions, is a Waverly competitor, publishing 60 journals for health and science professionals.

Times Mirror, which has been accumulating Waverly stock over several years, said in the SEC filing it had purchased 8,500 shares since Sept. 26, at prices ranging from $17.75 to $19.75 a share.

While a Times Mirror spokesman declined to comment on the Waverly holding yesterday, stock analysts and Waverly's largest stockholder said they believed the company would like to buy Waverly outright.

Analysts who follow Times Mirror said the move made sense because Times Mirror was flush with cash and Waverly fit in well with the company's other businesses.

On June 3, Times Mirror announced it wanted to focus on supplying -- rather than distributing -- information, and agreed to sell its cable holdings to Cox Enterprises Inc. for $1.4 billion in cash and $936 million in Cox stock.

"The company has all this money. They will reduce debt with a lot of it, but they need to find a place to put the rest of it," said John Strehly, who follows the stock for Dean Witter in New York.

Times Mirror has said it would use $850 million of the cash from the Cox deal to pay off its long-term debt, leaving $550 million for investments and acquisitions.

Waverly, which publishes 75 trade journals as well as medical books, lost $2 million on sales of $122 million in 1993 after a $3.6 million restructuring charge.

Like Times Mirror, Waverly recently has divested itself of a major division to focus on providing information. A year ago, the company sold its printing division for about $20 million, and announced it would concentrate on its faster-growing medical and scientific publishing business.

The news of the Waverly holding appeared to make no impact on Times Mirror stock, which closed unchanged at $32.875. But Waverly shares jumped 75 cents to match a 52-week high of $20.25

The biggest investors in Waverly -- members of the Passano family who control more than half of Waverly's stock -- said they felt flattered by Times Mirror's interest, but warned takeover speculators to steer clear.

"The fact that Times Mirror finds our stock attractive is a compliment," William M. Passano Jr., Waverly's chairman of the board, said yesterday. But, he added, "I've spent 40 years of my life building this company. There is more to life than selling things."

Mr. Passano said his son, William, runs part of the company's book sales division, representing the fourth generation of the Passano family in the company.

He said his family believes keeping the company independent is essential to the health of the Baltimore business community -- which has seen many local headquarters move out of state as local businesses have been swallowed up by corporate giants.

"Our situation is very simple. We have a very strong company with no debt. We don't need to sell the company," he said.

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