Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, December 23, 1993 TAG: 9312230018
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
Wednesday's move at last puts the 3 1/2-month takeover battle for the entertainment and sports conglomerate into the hands of shareholders. But the recommendation is not binding on shareholders, and Viacom Inc. could increase its $9.6 billion offer.
Still, the board's action was a defeat for Davis, who had pulled together the merger with Viacom. Davis had tried to fend off QVC Network Inc. Chairman Barry Diller, whom he fired from the top job at Paramount's movie studio several years ago.
While there was no official word from Paramount, an attorney representing the company's shareholders, Arthur Abbey, said he was informed of the board's decision Wednesday afternoon.
"I think the board was committed to endorsing the highest offer," Abbey said. "I think they had to conclude this was the higher offer."
Shareholders have 10 business days to decide whether to tender their shares to QVC.
"We're pretty much where we've been, waiting to see what Viacom is going to do," said Lisbeth Barron, a securities analyst at S.G. Warburg.
The major stock exchanges halted trading of Paramount, QVC and Viacom stocks Wednesday afternoon after news services reported the board's recommendation.
The exchanges routinely suspend trading in advance of news that could affect a stock's price so all investors can learn about it simultaneously.
However, when no announcements were made, trading resumed for a brief period in Paramount and Viacom shares late in the day.
Paramount stock closed down 62 1/2 cents at $79.62 1/2 on the New York Stock Exchange. QVC ended down 75 cents at $41.25 on Nasdaq. Viacom class A stock closed up $1.12 1/2 at $51 on the American Stock Exchange.
The Delaware Supreme Court this month ruled that Paramount directors, by contending that a merger with Viacom would provide greater value down the road, had unfairly cast aside QVC's offer.
The court ordered Paramount to consider both bids equally. Delaware had jurisdiction because Paramount is incorporated there.
Paramount's board asked QVC and Viacom to submit sealed bids Monday.
QVC said it lifted the cash portion of its new bid to $92 per share for 51 percent of Paramount's outstanding stock, up from $90 per share. Changes to the stock portion of the bid, however, essentially left its overall value little changed.
Viacom did not disclose the value of its new bid.
If QVC holds 51 percent of Paramount stock at the end of the 10-day tender period, the remaining shareholders will be given the chance to sell their stake in the company to QVC.
by CNB