Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, February 16, 1994 TAG: 9402160147
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Newsday
DATELINE: NEW YORK LENGTH: Medium
Cable TV programmer Viacom Inc. became the winner Tuesday in the epic struggle for control of Paramount Communications, beating out rival QVC Network after a five-month battle.
Now, Viacom's billionaire chairman, 70-year-old Sumner Redstone, can finally consummate the union he first proposed Sept. 12, turning his 5,500-employee cable programming company into a 57,000-employee entertainment and media behemoth.
The battle for Paramount became a symbol of the high stakes involved as technology promises to transform how entertainment, information and services are delivered to consumers.
Redstone, who will hold a controlling voting interest in the new company, said the deal was part of Viacom's ambition to "create a global media powerhouse of unparallelled proportions in the entertainment industry."
His rival, 51-year-old QVC Chairman Barry Diller, who once headed Paramount Pictures, may take some small comfort in the fact that he doesn't have to pay for the nearly $10 billion acquisition.
"Our current position demands brevity," QVC said in a terse statement Tuesday morning. "They won. We lost. Next." On Sunday, Diller, in what many viewed as a concession speech, said QVC had made its last bid for Paramount and was not willing to overpay. Tuesday, QVC, a West Chester, Pa.-based TV home-shopping business, said it was officially terminating its tender offer.
Viacom, whose holdings include Showtime, Nickelodeon and MTV cable networks, said Tuesday that holders of 74.6 percent of Paramount's stock had agreed to sell their shares to Viacom at its price. That made it the undisputed victor under Paramount's auction rules, which required the winning bidder to get at least 50.1 percent of Paramount's shares. Paramount shareholders who have not already agreed to sell their shares to Viacom have until March 1 to do so.
Though both bidders waged fervent public relations campaigns to promote their offers, in the end, practicality won out. Stockholders went for the offer that promised the most cash and protection for share value, even though QVC's offer was worth more at current stock prices.
While Viacom is acquiring Paramount, it also will be digesting Blockbuster Entertainment, a video retailer. The resulting company will have almost $9 billion in sales and worldwide operations in movies, books, sports, television, theme parks and retailing.
In a telephone interview Tuesday, Viacom's chief executive, Frank Biondi Jr., said there were no plans to sell any Paramount assets. He said the combined company - which has yet to be named - expects to pay down its roughly $10 billion in debt through cash flow from operations. Biondi said Viacom intends to proceed with Paramount's plans for a much-touted fifth television network, a project Diller was expected to scrap.
While Biondi said Viacom will try to keep as many employees as possible, he said some jobs inevitably would be lost as the company combines overlapping operations and reduces corporate overhead.
Analysts say Viacom faces a daunting task of reversing the recent disappointing performance of Paramount's moviemaking division and with getting management to refocus after the distraction of watching a bidding war that started just after Labor Day stretch into the new year.
Viacom also must deliver on the claimed synergies between the two companies' operations. Redstone said Paramount Pictures rather than another studio, for example, would make the movie based on MTV characters Beavis and Butt-head. He also plans to sell merchandise based on characters in Paramount films and Viacom cable shows as Warner Bros. does.
The Associated Press contributed information to this story.
Keywords:
INFOLINE
by CNB