Crown Media shares rise as unit Hallmark Cards considers taking it private
(Reuters) - Shares of Crown Media Holdings Ltd (CRWN.O) continued to rise following a 19 percent jump on Tuesday, after its unit and largest shareholder Hallmark Cards said it was considering taking its parent private.
The greeting card company, which owns 90 percent of Crown Media, said in a filing on Monday its standstill agreement with Crown Media will expire on December 31 and Hallmark will evaluate what it can do with its investment.
A standstill agreement is often signed between lenders and borrowers to stop a lender from asking the borrower for a repayment of the loan. It may also be used to block a hostile takeover.
Hallmark Cards' options for Crown Media, which operates the Hallmark Channel, include a "going private" deal, buying more shares in Crown, urging Crown's board to initiate a stock buyback plan, or maintaining its investment in the company.
Crown and Hallmark had entered into a debt recapitalization agreement on February 26, 2010, which allowed Crown to restructure some of its $1 billion debt to Hallmark that matures on December 31, 2013.
Crown Media shares were up 6 percent at $2.63 on the Nasdaq on Wednesday. They have almost doubled in value in the last year. The company is currently valued at $892 million.
(Reporting by Chandni Doulatramani and Sayantani Ghosh in Bangalore)
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