Fisher Sets $3.50 Special Cash Dividend

TV stations post gains in otherwise mixed Q2 earnings.

Fisher Communications, which is fending off an unsolicited takeover bid, said Thursday that it will pay shareholders a onetime $3.50-per-share “special dividend.”

The cash dividend, which will be financed with short-term borrowings and cash from operations, is payable Aug. 29 to shareholders of record Aug. 15. With just 8.7 million shares outstanding, the dividend totals $30.4 million.

Such a maneuver will squeeze short sellers, load up the company with debt that makes it a less attractive takeover target and build goodwill with existing shareholders.

The Seattle-based group broadcaster revealed in June that it received a $383 million unsolicited buyout bid, which Fisher rejected.

Fisher president and CEO Colleen B. Brown said in a statement Thursday: “During the second quarter, we announced that we were exploring strategic options for our real estate assets, most notably Fisher Plaza. We are currently evaluating the redeployment of cash proceeds from the sale of our Safeco holdings as well as the proceeds from the possible sale of Fisher Plaza. We do not anticipate finalizing our evaluation or communicating our strategy for the use of all potential cash proceeds until we reach a decision on the sale of Fisher Plaza.”

Fisher Plaza is an office-building complex in downtown Seattle that had a book value of $116 million as of December, according to the company’s 10K disclosure filing. Fisher has owned stock in insurance company Safeco since 1923 that it is now is selling.

The Thursday dividend announcement was accompanied by generally upbeat second-quarter earnings, including strong TV-station-segment results. However, weakness in Fisher’s radio business and write-offs pulled down corporate results for the three months ended June 30.

Fisher reported a loss from operations of $3.9 million in the second quarter ended June 30 versus a $3.3 million profit a year earlier. Non-operating results were skewed by a $103.6 million nonrecurring gain from selling stock in Safeco (more Safeco stock was sold after the quarter ended), a onetime $5 million expense from changing national rep firms and a $1 million forfeit of a deposit. Revenue rose 10% to $45.3 million.

In its TV-station segment, which includes 13 full-power TV stations, Fisher reported that cash flow climbed 23.1% to $9.1 million, while revenue advanced 15% to $27 million. Fisher TV stations reported that gross local ad revenue rose 3.5% in the quarter, although gross national TV ads fell 9.4%.

In TV, the company booked $2.2 million in political ads versus $129,000 a year ago. Retransmission fees from multichannel operators amounted to $800,000, up 26%.