Dallas Research & Trading Advises Investment In A Major New Venture by Billionaire John Kluge Through Orion and Actava.

DALLAS--(BUSINESS WIRE)--August 16, 1995--Dallas Research & Trading said today the Street has misunderstood the motivations behind billionaire John Kluge's sale of his stake in WorldCom (NASDAQ:WCOM). The Dallas-based brokerage house said investors could get in on the ground floor of a vast new Kluge-led international telecommunications and entertainment empire by buying shares of Orion Pictures, Inc. (NASDAQ:ORPC-$8 3/16) or The Actava Group (NYSE:ACT-$14 5/8).

Dallas Research said a new publicly traded venture, Metromedia International Group, Inc., will be formed through the merger of Orion Pictures, The Actava Group, Kluge's private Metromedia Telecommunications and a closely-held public company called MCEG Sterling. The already announced but virtually unnoticed merger is expected to close in September, and many investors will probably move rapidly into MIG shares, said DR&T analyst Steve Christenson.

The brokerage firm estimates that under the terms of the merger, an Actava share within 12 months could be the equivalent of $30 and Orion's per share value could be the equivalent of $17. Based on publicly filed documents, DR&T noted that there would be a one-for-one exchange of Actava shares for Metromedia International and an exchange of .57143 of MIG shares for each Orion share. In other words, said DR&T, it believes that MIG would be selling for at least $30 within the next 12 months, and it could be $70 within 24 months.

For a pure play on Kluge, said DR&T, investors might favor Orion Pictures over Actava, because 56% of Orion is owned by Kluge, either directly or through the until now privately held Metromedia Telecommunications. The brokerage firm also recommended that anyone owning Worldcom should sell it and switch into either Orion or Actava.

"Kluge has stated publicly he is selling his WorldCom stake for estate planning purposes, but in fact that's only half the story," Christenson said. The DR&T research chief predicted Kluge would use the cash from his sale of Worldcom and invest the cash in the new vehicle in various ways, including through possibly increasing his holdings in Orion.

"It is our opinion that the future prospects of WorldCom, while above average, do not compare with Kluge's vision of the future prospects associated with Metromedia International Group," Christenson said. "Kluge's newest venture will provide telecommunications and entertainment services to emerging markets, primarily in Eastern Europe and the former Soviet states, where Kluge through Metromedia Telecommunications already has staked out major claims. It is also believed Metromedia will soon enter markets in the People's Republic of China, Malaysia and the Middle East," Christenson added.

Christenson also said he believes Metromedia's senior management is averse to the competitive pressures associated with telecommunications operations in the United States. The company anticipates that by entering early in emerging markets at cheap licensing costs, Metromedia's returns will be dramatically higher than those available from domestic markets.

DR&T noted that Orion has a valuable film library of approximately 1,200 titles, including "Silence of the Lambs," "Dances With Wolves" and "Homicide, Life on the Street," the latter a prime time television drama with a major viewer following. Actava, which until now has had no direct ties to Kluge, has $200 million in cash and owns Snapper Power Equipment and 39% of Roadmaster Industries (RDM:NASDAQ), the bicycle manufacturer.

CONTACT: Steve Christenson at Dallas Research & Trading

214/239-2239