Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, August 26, 1995 TAG: 9508280044
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: NEW YORK LENGTH: Medium
The creator of the Fox television network and onetime Paramount studio boss said Friday he had gained control of a television station group owner, Silver King Communications. Silver King share prices soared 54 percent on the news.
Diller confidantes said Silver King's 12 UHF stations are expected to provide a foundation for a still-undefined national program service that could compete with the big broadcast networks for viewers and advertisers.
``It looks like he has found a platform for his expansion into the entertainment business,'' said Harold Vogel, who follows the industry for the investment firm Cowen & Co.
Diller had been missing this summer as Walt Disney Co. and Westinghouse Electric Corp. stepped forward with megadeals for the owners of the ABC and CBS networks and began assembling their management teams.
It was only a year ago that Diller appeared headed toward a top job at CBS after engineering a deal to have the network owner buy QVC Inc., a cable shopping channel operator that Diller was running.
Diller would have become chief executive of CBS. But the deal collapsed when QVC got a higher bid.
Diller subsequently left QVC, and the deal for Silver King marks his re-emergence into the public eye.
Silver King was spun off from Home Shopping Network Inc. in 1992, and its UHF stations continue to carry shopping programs.
But the stations include eight in the 12 biggest U.S. markets, such as New York, Los Angeles, Chicago and Philadelphia, and reach about 28 million households overall.
``It's not CBS, but that doesn't mean he can't turn it into a major entertainment vehicle,'' Vogel said.
Wall Street responded enthusiastically to the news, driving Silver King's stock price up by $13.75 a share by late afternoon to $39.50 in trading on the Nasdaq stock market. That is well above what Diller is paying.
The surge in Silver King stock reflected apparent optimism about Diller's ability to build the company.
Diller said he has agreed to pay $22.621/2 a share for a 20 percent stake in Silver King. With about 10 million shares outstanding, a 20 percent stake at that price would cost about $45 million.
He will wield more authority than the minority equity stake would indicate, however.
Diller was named chairman and chief executive of Silver King, which is based in St. Petersburg, Fla.
And Liberty Media Corp., which holds an option to buy a 70 percent voting stake in Silver King, agreed to transfer its voting power to Diller.
by CNB