Marvel starts exchange for 8% convertible preferreds

New York, Oct. 7 - Marvel Enterprises, Inc. announced an exchange offer for all 20.8 million outstanding shares of its 8% cumulative convertible exchangeable preferred stock.

The New York entertainment company is offering 1.39 shares of its common stock for each share of the convertible preferreds.

Marvel said the exchange is intended to substantially reduce or eliminate "the burden of required pay-in-kind dividends on the preferred stock." For the 12 months to Sept. 30 2002, the dividends totaled $16.3 million.

The exchange will also increase the trading float and liquidity of Marvel's common stock and reduce or remove Marvel's obligation to redeem the preferred stock for $10.00 per share in cash in 2011.

Marvel noted that its net income for the first six months of 2002 was $4.6 million but after the $8.1 million preferred dividend requirement the loss attributable to common stockholders was $3.6 million or nine cents per share. Pro forma earnings assuming 100% acceptance of the exchange offer on Jan. 1, 2002 would have been seven cents per share.

Morgan Stanley & Co., Whippoorwill Associates, Inc. and Marvel Enterprises' vice chairman Isaac Perlmutter have indicated they currently intend to tender all their 11.3 million shares of preferred stock, Marvel said.

The exchange expires at 5.00 p.m. ET on Nov. 18 unless extended.

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