TAFT &lt;TFB> STOCK RISES ON PROPOSAL

  Taft Broadcasting Co stock rose almost
  three points today as its vice chairman and an investment group
  proposed to sweeten a takeover offer for the company.
      However, several arbitragers said they would shy away from
  the stock at its current price levels since it is unclear how
  high bidding for the company would go and whether the company
  would agree to a takeover.
      "There are too many uncertainties," said one arbitrager.
      Taft stock rose 2-7/8 to 155-3/4.
      Dudley Taft, Taft vice chairman, and Narragansett Capital
  Inc said they sent a letter to the Taft board, stating they
  were committed to pursuing acquisition of the broadcast company
  and were prepared to negotiate a transaction in excess of 150
  dlrs per share.
      The company responded that the proposal would be submitted
  to the board of directors, but that no decisions have yet been
  made on a sale of the company.
      "Someone's betting this company will go for 170 (dlrs per
  share)," said one arbitrager.
      Arbitragers said the stock is a risky buy at current
  levels, unless an offer was accepted in the 170 dlr per share
  range. They said to make an arbitrage investment at this level
  would be chancy since it will take a long time for any
  transaction to be completed because of regulatory approvals
  necessary for the broadcast properites.
      Taft earlier rejected a 145 dlr per share or 1.35 billion
  dlr bid from the investment group. The company said it rejected
  the bid as inadequate based on advice of Goldman, Sachs and Co,
  its financial adviser. It said it would consider alternatives
  such as restructuring.
      Arbitragers speculated a bidding war may erupt for Taft,
  which has two large shareholders in an investment group led by
  Robert Bass and Carl Lindner, chairman of American Financial
  Corp. The Bass group holds 25 pct of Taft and Lindner holds
  16.2 pct. The Taft family, which founded the company almost 50
  years ago, has about 12 pct.
      Lindner last week told the Securities and Exchange
  Commission he may be interested in making a bid for Taft.
      "I could see if things got really crazy that it might go
  for 175 (dlrs per share)," said one arbitrager, but he
  speculated it probably would not even be taken over for more
  than a price in the 160s.
      Another speculated that Lindner might bid, but he
  speculated the investor would not really be interested in
  running the company. Lindner was unavailable for comment.
      Dennis McAlpine, an analyst with Oppenheimer and Co, said
  he had speculated the company might be considering a leveraged
  buyout.
      "Ideally, you'd have to break this thing up to satisfy all
  the interests involved," he said, adding the two largest
  shareholders might be interested in pieces of Taft.
      He said the highest takeover price he calculated for the
  company has been about 140 dlrs per share, but that the highest
  estimates on Wall Street have been about 160. He said the
  latter would be based on more optimistic expectations for the
  broadcast industry.
  

