CAPITAL IDEA: CASHING IN ON THE ABC TAKEOVER

FORT WORTH-Capital Cities’ deal with ABC didn’t make its stockholders millionaires overnight, but the takeover has turned into a windfall for Fort Worth Star-Telegram employees who invested heavily in the newspaper’s parent company.

Capital Cities Communication’s takeover of ABC came as a surprise to Wall Street, but rumors had apparently been flying in industry circles as much as six months earlier. There were some rumblings a few weeks before the takeover when, for no apparent reason, Capital Cities stock took a leap of nearly 20 points.

Still, many people at the Star-Telegram were left in the dark, including Jack Tinsley, executive editor and vice president of the newspaper, who says he was just as surprised as anyone when the news broke March 19. “I think it’s a marriage made in heaven,” Tinsley says of the Capital Cities deal. “It’s a big-league deal that puts the company in the spotlight.”

By the time the official word was released, employees were already counting their dollars and trying to buy more stock. Practically overnight, Capital Cities stock gained 19.5 points, closing at $202.75.

The takeover means that some Star-Telegram employees who have been investing in their company’s stock-option plan since 1978 have increased their money more than a thousandfold. “The first stock offered when the program started was purchased for $14 to $19,” Tins-ley says. Of course, some people sold their stock over the years, he says.

As recently as three years ago, employees could purchase stock for $63 a share. But even those who paid about $115 per share last year will see a sizable increase.

As participants in the Capital Cities stock-option plan, employees can purchase stock each year at 15 percent less than the market price. Each April, employees can agree to deduct as much as 15 percent of their salaries from their paychecks. At the end of a 12-month period, that amount plus 8 percent interest is applied toward the stock purchase.

But not everyone fared so well in the takeover. One employee, for example, sold several hundred shares of stock just a month before the takeover.