The marriage of Casper and Mr. Magoo has been called off. Harvey Entertainment, currently enjoying the successful launch of its original direct-to-video Casper’s Haunted Christmas, saw a planned transaction with Mr. Magoo-owner Classic Media fall through last month. On August 24, Harvey signed a letter of intent with Classic Media for an investment of approximately US$30 million in exchange for a new issue of Harvey preferred stock, convertible into common stock at US$3 per share. After two months of due diligence, Classic amended the letter of intent to reduce the conversion price and increase its deposit. Classic then terminated the transaction when Harvey wouldn’t agree to further reductions in the amount invested and the conversion price.
To help compensate for the lost cash infusion, Harvey’s board of directors has instructed management to seek cost-cutting methods to conserve the company’s cash reserves and reduce overhead. It is expected that the cost-cutting will be at the expense of PM Entertainment, the movie production entity Harvey acquired earlier this year.
‘We’re looking for new strategic partners and investors for merger, acquisition or additional equity,’ says David Bowers, senior VP of marketing. ‘There were several folks who approached Harvey before Classic Media, and those talks have started up again.’
Meanwhile, Harvey has several productions in the works that are on track for a 2001 release. A Monkey’s Tale, an animated feature acquisition, will go out theatrically this spring with a major home video release slated for the fall.
A Wendy the Witch animated TV series will roll out internationally next fall, and Casper and the Ghostly Trio, an new all-CGI direct-to-video feature, will be ready for next Halloween.