HOME SHOPPING DEAL OFF LIBERTY MEDIA CANCELS REST OF BUYOUT OFFER

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, April 13, 1993                   TAG: 9304130121
SECTION: BUSINESS                    PAGE: B6   EDITION: METRO 
SOURCE: GEORGE KEGLEY STAFF WRITER
DATELINE:                                 LENGTH: Medium
HOME SHOPPING DEAL OFF LIBERTY MEDIA CANCELS REST OF BUYOUT OFFER
Liberty Media Corp., which holds controlling interest in Home Shopping Network, on Monday abruptly withdrew its plan to acquire remaining Home Shopping stock. Liberty said its termination was the result of charges of bribery and other financial wrongdoing by top Home Shopping executives.
Liberty said a Florida grand jury investigation and lawsuit "have created uncertainties that may result in an indefinite delay of the merger."
Liberty, based in Cheyenne, Wyo., has controlled Home Shopping since February through ownership of 65 percent of the St. Petersburg, Fla., company's stock. Home Shopping operates a warehouse and order-filling center in Salem with about 450 employees.
Liberty had been expected to pay about $640 million last week for the 75 million Home Shopping shares it does not already own. Earlier, Liberty paid $160 million for its 65 percent interest from Home Shopping chairman Roy Speer.
After Liberty said it had canceled its plans, Home Shopping issued a statement that included a report of a second-quarter net loss of $26.9 million and a new reserve fund of $22.7 million to cover liquidation of overstocked merchandise. The company said it will stop selling items that are priced less than $10.
The loss compares with net earnings of $7.8 million a year ago. Home Shopping sales for the quarter fell 11.4 percent, to $244 million from $275.5 million a year ago.
Home Shopping did not answer a reporter's question about the impact of the new inventory policy on its Salem distribution center.
Liberty's action was triggered by numerous private lawsuits alleging financial improprieties by Speer and Lowell Paxson, the company former president, according to reports by The Wall Street Journal.
One of the allegations was that Speer and Paxson paid $12 million to a third executive after he threatened to expose their alleged secret interests in some Home Shopping suppliers.
The charges emerged in proceedings related to a divorce case filed by Wanda DiFilippo, former wife of Fernando DiFilippo, former general counsel of Home Shopping, the Journal said.
Vivian Carr, director of shareholder relations for Liberty, said the company "is continuing to consider all options" related to Home Shopping.
Gerry Hogan, president of Home Shopping, said no changes in management are planned and the Liberty announcement "has no bearing on my confidence in HSN's potential growth or my faith in HSN's ability to compete at the top of its industry."
Liberty was formed in 1991 as a spinoff from Tele-Communications Inc. of Denver, the nation's largest cable television company.
Liberty also is a part owner of Philadelphia-based QVC Network Inc., a major competitor of Home Shopping. In January, the Justice Department was looking at antitrust aspects of the Liberty takeover of Home Shopping.
That tie has led to fears that the Salem center might be closed or its operations combined with a similar order-filling center operated by QVC in Suffolk. Neither company has commented on that possibility.

by Bhavesh Jinadra by CNB