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

DATE: WEDNESDAY, January 19, 1994                   TAG: 9401190070
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: NEW YORK                                LENGTH: Medium

VIACOM INC. RAISED ITS BUYOUT OFFER FOR PARAMOUNT

Some analysts said Viacom's revised offer of cash and stock still was worth less overall than QVC's roughly $10.2 billion bid. But others said some traders may prefer Viacom's offer because it contains more cash than QVC has proposed.

There was speculation Viacom might come back with yet another bid; others said QVC Chairman Barry Diller may improve his offer as a precaution against losing what is believed to be the last major entertainment property available.

Viacom raised the cash portion of its bid for 50.1 percent of Paramount's stock to $107 a share from its previous bid of $105 a share. That would add about $120 million to the value of its offer, Viacom said.

Viacom also has boosted the value of the stock it plans to exchange for the remaining 49.9 percent of Paramount by including rights and warrants that it values at $700 million.

The rights, known as contingent value rights, are designed to help support the value of Viacom's Class B stock against any sizeable decline in the year following the deal. The warrants would give holders the right to buy more Viacom Class B stock at $60 a share over the next three years.

QVC has offered $92 a share in cash for 50.1 percent of Paramount's shares and securities for the remainder. The cash part is $900 million below Viacom's bid, but analysts said the stock was worth much more than Viacom offered.

Because both Viacom and QVC are offering cash and stock for Paramount, the values of the bids have changed daily. In addition, analysts' estimates of preferred stock and warrants in the offers have varied widely.

Paramount - a moviemaker, TV show producer and book publisher - said its board would convene this week to consider the revised bid. The board already has endorsed the offer from QVC, the West Chester, Pa.-based cable shopping channel operator, and has set a Feb. 1 deadline for the bidders to make their highest offers.

QVC offered no comment on the new Viacom bid.

Viacom, the owner of MTV, VH-1, Showtime and other cable channels, said its new bid was worth about $10.5 billion at Monday's closing prices, up more than $800 million by its estimate from its previous offer.

But the value of the revised offer sank Tuesday along with the price of Viacom's Class B stock, which lost $1.37 1/2 a share to $37.75 on the American Stock Exchange.

The value of QVC's offer also fell with its stock Tuesday. QVC slipped 50 cents a share to $43 on the Nasdaq stock market.

Viacom initially was Paramount's preferred merger partner. They announced a merger deal Sept. 12. But QVC, led by one-time Paramount Pictures boss Diller, made a competing offer eight days later and won a court fight in December that led the Paramount board to reverse itself and support QVC.

Paramount stock moved higher in the wake of the revised bid. In trading on the New York Stock Exchange, Paramount rose $1.25 a share to $80.