Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 22, 1993 TAG: 9309220106
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: Newsday
DATELINE: NEW YORK LENGTH: Medium
Paramount shares gained 7 1/4 to close at 77, in stark contrast to other, mostly falling stocks. QVC Network Monday evening announced a $9.5 billion bid that seemed to upstage Viacom's week-old $7.5 billion offer for Paramount. Viacom's Class A shares were down 2 1/2 Tuesday at 56 3/4 on the American Stock Exchange, while its Class B shares were down 2 5/8 a share to 50 7/8. QVC's shares Tuesday gained 1/8 to close at 56 1/8.
Meanwhile, there was speculation that other companies might enter the fray, including Capital Cities/ABC, Turner Broadcasting System, Blockbuster Entertainment, cable company Cox Enterprises and Bertelsmann AG.
The 7-year-old QVC has quickly emerged as a powerful force in the growing home-shopping arena, and its bid is backed by a $1 billion investment from shareholders Liberty Media Corp. and Comcast Corp. Last year, West Chester, Pa.-based QVC sold more than $1 billion worth of jewelry, clothes, tools and toys to more than 3 million customers.
QVC Chairman Barry Diller, who left his position as chairman at Fox Inc. and joined QVC in January when he invested $25 million, sees the shopping channel on the cutting edge of the coming interactive age. QVC touts itself as combining shopping with entertainment, because viewers can chat with program hosts and celebrity guests.
But if QVC were to buy Paramount, with its huge library of movies and TV shows, the programming possibilities will be endless. For instance, one observer speculated it could air Paramount's Star Trek TV shows and movies, then have the stars hawk Star Trek merchandise.
"All indications are that QVC is interested in combining entertainment with shopping," said William Squadron, New York City's telecommunications commissioner. "The focus of a lot of the participants in the cable industry is on programming. The real driving force will be who has the best access to the best programing or software."
Diller, who started the Fox network and oversaw the 20th Century Fox studio, has the backing of Tele-Communications Inc., the nation's largest cable operator. TCI, headed by John Malone, is upgrading its systems to carry 500 channels and is testing video-on-demand. Malone is chairman of Liberty.
In announcing the bid, Diller said "a combination between Paramount and QVC rests on the belief that the future belongs to the people who create the best programming for each emerging form of distribution."
Diller also has another reason to launch a bid for Paramount: He could get back at his former boss, Paramount chairman Martin Davis, with whom he had a A1G falling-out in the 1980s.
While Paramount's board has endorsed the Viacom bid, it will be forced to consider QVC's offer, and others, if they emerge. One possibility raised by some analysts, that a broadcast network could buy Paramount - which owns one of the few independent Hollywood studios, as well as Simon & Schuster book publishers, the New York Knicks and New York Rangers, and TV stations - remains to be tested.
by CNB