CRWN Crown Media Holdings - Class A (MM)

Hallmark Cards Inc. said it would take subsidiary Crown Media Holdings, Inc., which it already owns nearly all of, private for about $175 million.

Hallmark, which holds a 90.3% stake in Crown, delivered a letter to its board Tuesday saying it intends to acquire the remaining stock of Studio City, Calif.-based Crown for $5.05 a share, a 2.4% premium over Tuesday's closing price. Crown has about 360 million shares outstanding, including Hallmark's stake.

Because Hallmark owns more than 90% of Crown's shares, it can proceed with a so-called short form merger under Delaware law without any action or consent by Crown's board of directors or the approval of other shareholders.

"Hallmark intends to operate Crown, and its use of the highly recognized Hallmark brand in the entertainment industry, to strengthen the Hallmark brand across all of the Hallmark businesses," the company said in the letter. Crown operates the Hallmark Channel.

Hallmark said the move will give the company "greater flexibility to respond to the many risks and challenges of the rapidly changing cable and entertainment landscape and protect its substantial investment in Crown" and make decisions "in light of what is best for Hallmark as a whole, without being constrained by public, minority stockholders at Crown."

Hallmark also anticipates a decrease in costs associated with being a public company.

Shares of Crown, which have risen 15% over the past 30 days, were inactive premarket at $4.93.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

March 09, 2016 08:25 ET (13:25 GMT)

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