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Show usiness Salt Calif 2rilmnr 21 r Tuesdav Morning -- Ma Sit lion Metromedia Agrees to Sell Seven TV Stations For $2 Billion to Murdoch-Davi- s Company major force in broadcasting,' said Fred Anschel, who follows the media and entertainment industries for the investment firm Dean Witter Reynolds Inc. These six stations are in major markets and those are pretty-goomarkets to be in." But he said there are "a lot of hurdles" to be crossed before the deal can be completed "Its going to takt a lot of time," Anschel said. Barry Kaplan, a media company analyst for the investment firm Bear Stearns, said he thought the price Murdoch and Davis agreed to pay By Skip Wollenbcrg Associated Press Writer NEW YORK Metromedia Monday it agreed in principle to sell its seven television stations for more than $2 billion to a new company being formed by publisher Rupert Murdoch and businessman Marvin Davis. Simultaneously, Murdoch and Davis said they agreed in turn to sell one of the stations, WCYB-Tin Boston, to Hearst Corp for about $450 million in cash The other six stations are W.NEW-T- - big-cit- Inc-sai- y in New York, WTTG in Washington, Houston and rate in Chicago, KRIV-T- in in KRLD-T- Dallas-For- Hoping to Baise $385 .Million t Worth. To help finance the deal, Murdoch spokesman Howard Rubenstein said Murdoch had decided to sell The Village Voice, a weekly alternative newspaper in New York which Murdoch has owned since 1977. $55 Million Minimum He said Murdoch wants a minimum of $55 million for the newspa- China Backs Stock Sale For Giant Railroad Line By Rick Gladstone Associated Press Writer China has sancPEKING tioned a stock sale to raise $385 million for building the nations longest railroad line, an official news report said Monday. It appeared to be the biggest stock offering since the Communist Party resurrected the capitalist practice last year to help finance economic development. The state-ruChina news service, Zhongguo Xinwen She, said the stock will be offered by the government of the Inner Mongolia autonomous region, a vast plain along the Mongolian frontier. The news service quoted Inner Mongolia's Communist Party Secretary Zhou Iluiri as saying the stock sale will finance the proposed railway, a project which, when completed, will be Chinas longest single rail line. It will run from the Inner Mongolia city of Jining northeast through Liaoning province to the city of Tongliao in Jilin province, opening an important corridor to move freight and passengers through Chinas northern interior, the report said. There was no explanation for per. Rubenstein said no decision has been made on whether Murdoch will sell either The New York Post or the Chicago Federal Communications Commission rules prohibit an owner of a broadcast property from controlling more than 5 percent of a daily newspaper in the same city. John W. Kluge, chairman and chief executive of Metromedia, said in a announcement of the sale, that the aggregate price will exceed $2 billion, including assumption by the new corporation of the public debt issued by Metromedia Broadcasting Corp. in December Sun-Time- d n four-senten- 1984 Metromedia Broadcasting is a subsidiary of Metromedia Inc. Rubenstein said the amount of public debt being assumed is about $1.35 billion. With the proceeds from the sale of the Boston station, he said Davis and Murdoch will have to come up with $200 million. Joined Forces It wont be the first time Murdoch and Davis have joined forces in a business effort. They each already own 50 percent of Twentieth Century Fox Film Corp. "If he buys the station, he will be a Jining-Tonglia- o 540-mi- for media properties recently "Kluge is making out like a bandit," he said Cellular Radio Business He said he suspected that Metromedia would use the proceeds to concentrate on development of its cellular radio business. Murdoch also owns daily newspapers in Boston and San Antonio, Texas, and New York Magazine. James C McKinney, whose bureau at the FCC scrutinizes all TV transfers, said neither the Voice nor the New York magazine would be affected by the in Los KTTV-T- WFLD-T- Angeles, was higher than the going how the stock will be sold and whether the buyers will be Chinese, foreigners or both. The report also gave no details of share prices or dividends. But it was likely that the buyers will not be limited to Inner Mongolias 19.5 million people, many of them herdsmen who subsist on the barren plains. Zhou was quoted as saying the stock sale will begin shortly and the railway construction is expected to take five years. The offering follows calls in the official press for large-scal- e stock sales and hints that China may reopen the Shanghai Stock Market, closed after the communists came to power in 1949. "Profitable, well managed enterprises should be able to raise capital by selling shares and bonds, thus alleviating the huge strain on the state's limited financial resources, the magazine China's Finance said last month. Shanghai banking managers have said in press reports that a stock market may be established within the next few years. The English-languag- e China Daily said reopening an exchange in China's largest metropolis is the "the debate of the day in financial circles. 19io 7, Page I) 1 by Brenda nBoyd ! NATO MEMBERS DEFENSE BUDGETS 1904 FCC regulations on broadcast and newspaper ownership Another question raised by the sale involves another federal acquirement s which prohibits from 20 more than owning percent of a TV licensee or 25 percent of the licensee's parent company Murdoch, an Australian citizen, owns a 49 percent interest in News Corporation Ltd an Australian pub lishing concern through which he owns half of Twentieth Century Fox Legal Hurdle Murdoch and Kluge met last week with members of the FCC. and commissioner James H Quello said Murdoch told him Murdoch will become an American citizen so he can clear that legal hurdle to ownership of American TV stations Rubenstein said Murdoch intends to apply for US. citizenship "very promptly and that he expects to get it without problems "Hes been here 10 years, and his children go to school here," Rubenstein said. A third question 'nvolves how American citizenship would affect Murdochs television holdings in Australia. Australian representatives of Murdoch's News Corporation met Monday with members of the Australian Broadcasting Tribunal in Sydney, Australia, to discuss Murdoch's plans to buy the American TV stations. The chairman of the tribunal, David Jones, has said the panel will investigate the implications for Murdoch's ownership of two TV stations in Australia should he proceed with plans to become an American citizen. Network 10 Group In Australia, Murdoch's company controls the Network 10 group through stations in Sydney and Melbourne, both of which are up for license renewal. Under Australian law, owners of television stations must be Australian citzens. A spokesman for federal immigration minister Chris Hurford has said Australian law does not allow dual citizenship. Metromedia was taken private last year through a leveraged buyout, a transaction that resulted in the company accumulating a debt of about $1.3 billion. In a leveraged buyout, a company is purchased with largely borrowed funds that are repaid with the target companys cash flow or sale of its assets. $ 56.W institute for Strategic Stuams SOURCE: International Mobil Oil Plans to Dispose Of Montgomery Ward Unit - NEW YORK AP) Mobil Corp took the first step toward disposing of Mobil, the oil company its struggling Montgomery Ward & Co unit Monday, announcing a major facelift that it said is aimed at enreabling the nation's tailer to operate independently To oversee the reshaping of the retailing institution into a smaller, more profitable organization, Mobil said it had hired Bernard Brennan, president of Household Merchandising Inc. and a former Montgomery Ward executive, to return as president of the retailer. Mobil said it planned to eliminate the money-losinsegments of its network of 2,999 catalog stores, what spokesman Herbert Sehmertz termed "radical surgery." Mobil also said cutbacks were planned for its retail chain of 322 Montgomery Ward stores and 44 Jefferson Ward discount stores, and that administrative costs would be significantly reduced. t nations after Exxon Corp., second-larges- pur- chased Montgomery Ward for $1 billion in 1976 as part of an attempt to diversify from the energy business during a time when it was flush with profits from rising oil prices. It has since invested another $609 million in the business. Montgomery Ward contributed $53 million in earnings on $6.5 billion in sales in 1984, an improvement on the sixth-large- Mobil g million in earnings on $6 billion in sales in 1983. But in addition to the costly investment and disappointing return on sales, it also has had its lean years, including losses of $93 million in 1982, $160 million in 1981 and $162 million in 1980. "It is our intention to maximize Montgomery Wards value by shaping it into a business which can operate as an independent, profitable retailing company without Mobil ownership or financial guarantees, Rawleigh Warner Jr., chai See D-Column 1 $40 The company did not identify the operations to be scrapped nor did it estimate how many of the 77,000 employees would lose their jobs as Montgomery Ward becomes smaller. Reduce Profti It said the cost of the restructuring will reduce Mobils after-taprofit by about $500 million in 1985. That compares with earnings in 1984 of $1.27 billion. x Hayden Introduces Ensemble Finally a product that fulfills the promise of the Macintosh Well Not Only Finance Your New Building. Well Finance Whats Around It. l .nstMiilile rims in I he 12NK anil 512K Macintosh Its always sad to see a company settle for less of a building just to get away with less of a down pavment. 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