Coke adds life . . .

Press, 21 January 1982, Page 10

Coke adds life . . .

The Coca-Cola Company has agreed in principle to acquire Columbia Pictures Industries in a deal worth about SNZIOS2 million. NZPA-Reuter reports from New York. The acquisition of the profitable film company would be Coca-Cola’s first major purchase under Roberto Goizueta. who became chairman and chief executive officer last March and indicated that he would diversify Coke into new fields.

In previous years, as the American market for soft drinks had levelled off. Coke has diversified into such fields as ocean farming and orange groves, but this would be its first venture into entertainment.

Columbia is now one of the more successful motion picture companies in the United States after having fallen on hard times about 10 years ago. In 1973, the company’s future was in doubt and the stock was trading at only SUSI. 62 a share. (Its latest price is $41.75.)

But after several successful films. Columbia now has a reputation as a w’ell managed company with bright prospects. In Sydney, the merchant bank. Hill Samuel Australia. Ltd. announced that it had been retained to advise on the possible sale of Hoyts, one of the big three in the Australian cinema business, the "Sydney Morning Herald" reported. A spokesman for the bank said it was too early to put a definite value on Hoyts, although a number of potential overseas and local buyers had already 'expressed interest in the company. Hoyts was bought from Twentieth Century Fox last September by a consortium which included the Aetna Insurance Group of the United States, with 50 per cent, the Denver oil millionaire, Marvin Davis, and the Dutch oil trader, Richco.

Three months earlier Mr Davis and Marc Rich, one of the principals of Richco, paid SNZB66M to take over Twentieth Century Fox.

The chief executive of Hoyts in Australia, Terry Jackman, said yesterday that the company’s” new owners were only considering the possibility of selling. The company’s two main assets are its network of 81 cinemas throughout Australia. including almost 30 drive-in theatres, and its continuing link with Twentieth Century Fox. The sale of Hoyts would not affect the company’s role as distributor of Twentieth Century Fox films. Mr Jackman said. It is understood that, while Hoyts’ rich real estate assets through its cinemas is a big selling point, a vital part of any sale will be the link with Fox and, in particular, access to its massive film library, the “Herald" said. This would provide an invaluable bank of material to draw on for cable and pay television operation, an area currently closed to Hoyts because of restrictions imposed by foreign ownership.

Hoyts was formed in 1930 by George Russell, a Melbourne dentist.