Gamco urges Fisher Communications to use cash flow for share repurchase, not acquisitions

By Lisa Kerner

Charlotte, N.C., April 24 - Gamco Asset Management Inc. reiterated its belief that Fisher Communications, Inc. should allocate cash flow to a share repurchase "as a way to enhance the intrinsic value" of the company's remaining shares "with less risk and more certainty" than the pursuit of acquisitions.

The investor made its comments in an April 24 letter to Fisher president and chief executive officer Colleen B. Brown that was included as part of a schedule 13D filing with the Securities and Exchange Commission.

In the letter, Gamco, an 18.26% shareholder, made reference to the upcoming annual meeting as well as to the April 23 announcement that Liberty Mutual Group agreed to acquire Safeco Corp. for $68.25 per share.

In December, Fisher sold some 700,000 shares of Safeco common stock, which represented 23.3% of Fisher's total Safeco holdings. The shares were sold at an average price of $58.05 per share and the proceeds were used to fund the Bakersfield acquisition, according to Fisher's fourth-quarter 2007 results.

Gamco said that while it had discussed with Fisher in the past ways to monetize Safeco using a "cash rich split-off," the investor's suggestion was dismissed.

Previously, Gamco Investors, Inc. said it planned to vote against Fisher's proposed incentive plan and withhold voting authority on the company's directors at the company's annual meeting on April 30.

In November, Gamco Investors submitted a proposal for inclusion at Fisher's 2008 annual meeting in order to change the company's bylaws. As previously reported, the proposal would require shareholder approval in order for Fisher to engage in a transaction in which the company would pay more than $25 million.

Seattle-based Fisher Communications owns television and radio stations.

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