MOVE over Godzilla. If the latest entertainment company takeover saga works out, it looks like Hollywood's King Kong may be going Japanese. Hollywood has always prided itself upon being a ``global village.'' The themes of contemporary American movies have been increasingly universal in scope. And that's true in terms of film distribution. Overseas box office revenues on a film often equal or surpass US receipts. Little wonder then that Matsushita Electric Industrial Company, Japan's giant electronics conglomerate, has been courting MCA, one of the United States' few remaining independent entertainment companies. MCA's Universal Pictures is the corporate custodian of such thoroughly charming characters as Kong and Jaws.
The Matsushita/MCA negotiations represent only the latest act in a continuing drama of takeovers and mergers involving US entertainment companies. In just the past year or so, overseas groups have bought controlling interests in Columbia Pictures (by Sony Corporation) and MGM/United Artists (by Path'e, a French film company controlled by Italian entrepreneur Giancarlo Parretti). MGM/UA shareholders approved the Path'e takeover last week. Path'e has until Oct. 23 to muster the money for its purchase.
Meanwhile, during the past several years two major domestic mergers have occurred. Warner Communications Inc., which owned Warner Brothers, merged with Time Inc. Twentieth Century Fox was acquired by a company controlled by press magnate Rupert Murdoch. Thus, of the major US film companies, only Paramount, Disney, and Orion remain independent. And some Wall Street analysts expect that takeover interest will now turn to mighty Paramount.
Whether the Matsushita/MCA linkup goes through is still speculative. Secret talks have reportedly been on-again, off-again. And the feeling here is that even if Matsushita doesn't buy MCA, someone else will. But whatever happens, it is not surprising that MCA would be considered a prime takeover candidate, nor that a Japanese company like Matsushita would be interested in buying a US entertainment company. Matsushita, which makes VCRs and other hardware under such brand names as Panasonic, Quasar, and Technics, needs a software company like MCA. MCA needs cash to finance its films. And, probably not inconsequential, Sony, which now owns Columbia Pictures, is a rival of Matsushita.
Beyond the film company takeovers, the next round of entertainment-industry mergers will likely involve a ``combination of broadcast companies and major software suppliers,'' says Christopher Dixon, an analyst with Kidder, Peabody & Co. Analysts speculate about such combinations as CBS Inc. and the Walt Disney Company, or Capital Cities/ABC and Paramount.
A takeover of MCA would presumably be valued at between $80 or $90 a share, or up to $8.3 billion. Such a cost would make Matsushita the Japanese takeover king in the US, since the Columbia acquisition only cost Sony $3.4 billion. But Matsushita has assets of $50 billion, including an estimated $12 billion in cash. That's enough to keep King Kong in fresh bananas.
Universal is steeped in US film tradition, being the company of ``Frankenstein'' and other Gothic horror thrillers of the 1930s, and a number of Steven Speilberg hits in the 1980s, including ``E.T.'' Parent company MCA also owns theme parks; Geffen records; G.P. Putnam & Sons, a publishing company; and television superstation WWOR-TV, which would have to be sold in a foreign takeover, to meet federal broadcasting rules.
``Clearly, the pressure is on film companies to become truly international in scope, and have a broad range of products,'' says Dennis McAlpine, an industry analyst with Oppenheimer & Co., an investment house.
Entertainment stocks have remained well below market averages this year. But the potential for blockbusters is real. MCA's Universal has done fairly well this year, with such hits as ``Back To the Future III.'' Universal's Christmas release is a potential hit: ``Kindergarten Cop,'' starring Arnold Schwarznegger.