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RSSThe Kansas City Star (Kansas City, Missouri)
By Jennifer Mann, The Kansas City Star, Mo.
Dec. 9--Hallmark Cards Inc. has sold its Hallmark Entertainment LLC production company to its president, Robert Halmi Jr., and private investment firm Kelso & Co. for an undisclosed sum.
Hallmark spokesman Steve Doyal said the Kansas City-based greeting card company decided to divest itself of Hallmark Entertainment, which produces movies and miniseries for networks, because it didn't reinforce the core Hallmark brand name.
"We've made the decision to focus our energies on the Hallmark-branded businesses," Doyal said, citing the Hallmark magazine as an example of a product or service that reinforces the company's name among consumers.
Hallmark acquired the film production company in 1994 for $365 million from Robert Halmi Jr. and his father, Robert Halmi Sr., and cast it as Hallmark Entertainment. In 2003, the latest year for which figures were available, it contributed $344 million of Hallmark's $4.3 billion in sales, or about 8 percent.
The deal is projected to close in about two months, and the company will revert to the name it carried when Hallmark acquired it, RHI Entertainment LLC.
The production company makes movies and miniseries for all four major networks and for more than a dozen cable networks.
Recent titles produced by the company include "The Lion in Winter," "Mitch Albom's The Five People You Meet in Heaven" and "The Poseidon Adventure."
Hallmark Entertainment also has produced some of the titles in the Hallmark Hall of Fame series. Ownership of 55 Hallmark Hall of Fame titles that were part of Hallmark Entertainment's library of titles will revert to Hallmark Cards.
The sale comes as Hallmark shops its Crown Media Holdings Inc. cable television channel. A recent round of bidders included about a half-dozen parties, including the Walt Disney Co., Time Warner Inc., Viacom Inc. and News Corp., according to a report earlier this week in the New York Post.
Previously, analysts have estimated that Crown Media would sell for about $1.8 billion to $1.9 billion, which would include debt of $886 million. If the channel sold in that range, after subtracting the debt, the sale would equal about $10.50 a share. Crown Media closed Thursday at $9.38 a share.
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