Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, August 18, 1995 TAG: 9508180040
SECTION: BUSINESS PAGE: A11 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: NEW YORK LENGTH: Medium
It may need the extra money. With Ted Turner reportedly considering making a rival $6 billion bid, Wall Street is betting that the price tag for CBS will be higher than the $81 a share Westinghouse has agreed to pay.
For the first time since CBS and Westinghouse announced their deal Aug. 1, CBS shares rose Thursday above the agreed buyout price - a sign that some traders expect the ultimate buyout price will be higher.
CBS rose $1.37 1/2 to close at $81.37 1/2 a share Thursday on the New York Stock Exchange.
``The Street thinks there is going to be a second bid,'' said John Tinker, media analyst for Furman Selz. ``The issue then becomes, 'Does Westinghouse increase its bid?'''
One of the banking sources, speaking on condition of anonymity, said banks have committed $12 billion in financing to the Westinghouse bid for CBS.
Westinghouse will need $7.5 billion in financing to buy CBS for $81 a share, assure itself of adequate working capital and refinance bank lending agreements, the sources said.
Westinghouse declined to comment on how much bank financing has been committed so far but spokesman Kit Newton said the effort was ``going well, ahead of schedule.''
Asked for Westinghouse's reaction to rumors that Turner would launch a competing bid for CBS, another Westinghouse spokesman, Roy Morrow, said ``nothing will diminish our resolve to do whatever is necessary to close this deal and create this nation's leading broadcast company.''
``We are going to do what is necessary to get that job done,'' he said.
Tinker, the media analyst, said the disclosure of financing progress indicated Westinghouse wants ``to move as fast as it can'' to preempt another bidder.
He said the odds are Turner would bid, but added ``you never know.''
Turner Broadcasting System Inc. has called a special board meeting for Monday to discuss issues surrounding its chairman's efforts to arrange a bid for CBS, a source said Thursday.
The Atlanta-based media and entertainment company, parent of the CNN network, declined to comment on a board meeting or on a report in The Los Angeles Times that Turner was assembling a $6 billion cash bid for CBS.
But a source familiar with the situation, speaking on condition of anonymity, said a phone meeting of the Turner board was set for Monday and it was likely the CBS situation as well as other deals that could affect Turner's ability to bid for the CBS network would be discussed.
It is widely believed that CBS Chairman Laurence A. Tisch wants cash rather than securities for CBS, and it is considered unlikely that Turner could borrow the money needed. But Turner has other ways to raise money.
One option reportedly under discussion is Turner's possible acquisition of King World Productions Inc. through a stock swap.
King World distributes ``The Oprah Winfrey Show'' and ``Wheel of Fortune'' among others and is a big cash generator. It's believed that Turner could borrow on the cash flow to finance a CBS bid.
Turner also is believed to be exploring the possibility of buying Samuel Goldwyn Co., a independent film and TV production company. Turner already owns the New Line Cinema and Castle Rock production companies.
There have also been reports that Turner has discussed the possibility of enlisting Microsoft Corp.'s help by getting the computer software leader to invest as much as $2 billion in his company so he could use the proceeds to help finance a CBS bid.
Turner made an unsuccessful bid for CBS a decade ago but still wants to add a network to his array of cable holdings, which also includes Turner Network Television and the Cartoon Network.
Turner has been blocked from buying a network in the past by Time Warner Inc., which has three seats on Turner's board and veto power over any major transaction. But Time Warner has expressed interest in selling its stake in Turner and is reportedly demanding more than $1.6 billion.
by CNB