Hallmark has choices on Crown Media stake
06/26/2013 6:45 PM
06/26/2013 10:05 PM
Hallmark Cards Inc. said it is weighing various options for its ownership of Crown Media Holdings Inc.
Crown is the parent company of the Hallmark Channel and Hallmark Movie Channel. Its shares trade publicly, though Hallmark Cards and related entities own 90.3 percent of the stock.
Hallmark Cards had agreed to a standstill provision with Crown Media in 2010 that prevents the Kansas City-based company from buying or selling shares.
In a filing with the Securities and Exchange Commission, Hallmark said that standstill ended Dec. 31 and it was considering its options at that point.
Julie O’Dell, a Hallmark spokeswoman, said the filing reflected the company’s considerations rather than any immediate actions.
“We’ll consider all alternatives,” she said.
A Crown Media spokeswoman declined to comment.
Hallmark’s filing with the SEC said it may simply maintain its holdings.
It also is considering buying more shares, either privately or on the open market, or “engaging in a short-form merger” that would eliminate the minority shareholders’ ownership position in Crown Media “or proposing another form of ‘going private,’” the filing said.
Other possibilities listed in the filing include proposing that Crown Media consider buying back its own shares or delisting its shares from the stock market and terminating Crown’s registration with the SEC.
Finally, Hallmark said its considerations included whether to dispose of its holdings, either partly or in total.
Shares of Crown Media on Wednesday gained 14 cents to $2.62, a 5.7 percent increase. The stock had jumped 40 cents, or 19 percent, on Tuesday after Hallmark submitted the filing to the SEC on Monday.
The standstill agreement that expires at the end of this year stems from a 2010 recapitalization of Crown Media.
Crown’s finances have improved since the recapitalization. Revenues have increased in each of the last three years, reaching nearly $350 million in 2012. The once money-losing company posted a profit in each of those years as well.
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