THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, January 5, 1995 TAG: 9501050392
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD
STAFF WRITER
LENGTH: Medium: 66 lines
About 500 employees of the Christian Broadcasting Network are about to get a late Christmas gift.
Virginia Beach-based CBN said Wednesday that it will distribute to the employees $5.4 million in cash from the sale of some of its stock in The Family Channel's parent company. The payout works out to an average of about $10,800 per worker.
The distribution is part of a plan set up in 1990 by CBN when it sold Family Channel for $250 million in cash and securities to International Family Entertainment Inc. The ministry retained a large ownership position in the entertainment company as part of that transaction. CBN decided to put part of its IFE stock holdings in an employee-retention program.
``This distribution is part of CBN's way of saying thanks for their loyalty and devotion,'' said Gene Kapp, a ministry spokesman. He said current employees who joined CBN on or before Dec. 31, 1989, are eligible for the payout. That works out to about half of CBN's work force.
CBN and IFE are both headed by Pat Robertson, but are legally separate. Robertson and his son, Timothy, set up IFE as the vehicle for the leveraged buyout of Family Channel. They are among the entertainment company's major stockholders.
In the deal announced Wednesday, IFE itself is buying the stock from CBN. It will acquire 450,000 of its own shares at $12 each. The entertainment company has been repurchasing its shares under a buyback program authorized in late 1993.
The sale is one of a number of IFE securities transactions in the past several years involving CBN and its sister organization, Regent University, also headed by Robertson.
CBN sold $100 million worth of IFE stock during the entertainment company's initial public offering in 1992. Later that year, it donated another big block of securities to Regent, which has since sold $107.5 million of its holdings back to IFE. Also, in late 1993 CBN sold about $40 million worth of IFE stock to Capital Group Inc., a Los Angeles-based mutual-funds company.
CBN and Regent said they used the cash proceeds of those sales partly to diversify their investments, which have been overwhelmingly concentrated in IFE securities.
Tim Robertson, IFE's president and chief executive officer, said the latest deal was initiated by CBN but works out well for the entertainment company, too. In a prepared statement, he said IFE's stock is ``undervalued and represents a sound investment'' for the company.
IFE's Class B shares have traded as high as $22 in the past year - $10 a share more than the sale price agreed to under the deal Wednesday. The $12-a-share price is also 50 cents per share less than the closing price of IFE stock Tuesday on the New York Stock Exchange.
The stock repurchase is to be executed next Tuesday.
The sale will leave CBN with about 3.4 million Class B shares of IFE, making it the company's third-largest shareholder.
Tele-Communications Inc., the nation's largest cable-TV operator, is the single largest holder of IFE securities. Regent University, investor Mario Gabelli and the Robertsons themselves are among other large owners of stock in IFE. by CNB