DATE: Tuesday, October 21, 1997             TAG: 9710210285

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: STAFF AND WIRE REPORT 

                                            LENGTH:  116 lines

A BIG DAY FOR DEAL-MAKING ACQUISITIONS AND MERGERS ARE WORHT BILLIONS.

Want some big deals? The business world was full of them Monday.

There was another major consolidation among mega accounting firms. ITT Corp., which had been fending off a hostile takeover by Hilton, agreed to a sweeter deal. And Barry Diller of Home Shopping Network became an even bigger player in the entertainment field.

BIG SIX BECOMES FOUR: Accounting giants Ernst & Young LLP and KPMG Peat Marwick LLP announced a merger Monday, creating the nation's largest accounting firm with about $18.3 billion in annual revenues.

Terms of the deal were not disclosed.

Stephen F. Evans, managing partner of KPMG's Norfolk office, said the planned merger should have little local effect because there won't be overlapping offices to consolidate.

KPMG Peat Marwick has an office in Norfolk with nine partners and 105 employees. The firm's roster of clients includes Norfolk Southern Corp., Norshipco and Sentara Health System.

``I don't see any cutbacks,'' Evans said. ``If anything, our work force will expand over time'' because the merger is likely to increase the combined firm's roster of foreign companies with operations in Hampton Roads.

Just last month, fellow Big Six companies Coopers & Lybrand and Price Waterhouse agreed to merge. That combined company will have $13 billion in annual revenues, which placed it temporarily on top of the list.

Coopers, which took over the Ernst & Young office in Virginia Beach, has 32 local employees, and Price Waterhouse has 25 employees in an office in Norfolk.

ITT SAYS YES TO STARWOOD: After months of resisting Hilton Hotel's uninvited $11.1 billion buyout offer, ITT Corp. said Monday it has agreed to a $13.3 billion bid from the real estate investment concern Starwood Lodging.

The combination of ITT and Starwood would create the world's largest hotelier, bringing some 650 Sheraton, Westin and Caesar's hotels and casinos in 70 countries under the control of one corporation with $10 billion in annual revenues.

Hilton did not immediately respond to news of the Starwood deal, so it was not known if it would try to top Starwood's offer. The company, based in Beverly Hills, Calif., did not return calls seeking comment.

Critics had urged ITT's chairman and chief executive, Rand Araskog to work with Hilton for a higher bid.

``The ITT-Hilton matter was not proceeding to Mr. Araskog's satisfaction, and this was a way he was able to control the destiny of ITT,'' said Bjorn Hanson, who heads the lodging and gaming unit at Coopers & Lybrand. ``With all of the criticism of Araskog acting like entrenched management, the end result is he delivered for his shareholders.''

Starwood's Barry S. Sternlicht will continue as chairman and chief executive of the combined companies. Sternlicht said Starwood intends to retain ``a significant number of ITT senior executives'' after the deal is completed.

Araskog is expected to be named as one of four ITT representatives on the Starwood board.

ITT stock gained $5.375 per share, closing at $75.75. Starwood shares were up $1.125 to $57.625, and Hilton shares were up .5625 cents to $33.

SERIOUS HOME SHOPPING: Home Shopping Network's parent company is buying most of Universal Studios' television operations, including the USA Network and Sci-Fi Network, for $4.1 billion, the companies said Monday.

HSN also gets Universal's U.S. television production and distribution business, which includes ``Law & Order'' and ``Xena: Warrior Princess'' and could be a valuable source of programming.

``That should help catapult Mr. Diller's plans,'' said Jill Krutick, an entertainment analyst at Smith Barney. ``It will allow him to . . . dramatically fast-forward those endeavors.''

HSN Inc., headed by entertainment mogul Barry Diller, will change its name to USA Networks Inc. and combine the cable networks with HSN's broadcast stations and controlling interest in Ticketmaster. Universal will get a 45 percent stake in HSN and $1.2 billion in cash.

The sale comes a month after Universal's parent company, Seagram Co., bought sole control of USA Network from partner Viacom Inc. to end a lengthy legal battle.

Diller, once the creative force behind the Fox network, owns a string of UHF stations in major cities through his Silver King Broadcasting unit. Diller envisions those stations - now serving as carriers for Home Shopping Network - as forming a network built on local news, entertainment and sports from each of its markets.

Investors in both companies cheered the deal. HSN shares were up $3.25 to $41.875 on the Nasdaq, while Seagram shares rose $2.8125 to $35.25 on the New York Stock Exchange.

RAYCOM WANTS LIN: Raycom Media Inc. has offered to acquire LIN Television Corp., parent company of Hampton Road's WAVY-TV, for $52.50 a share, or a total of more than $2 billion, the companies said Monday. The price exceeds a $1.7 billion, $47.50-a-share offer from Hicks, Muse, Tate & Furst Inc., a Dallas-based buyout firm.

ADIOS TO TRAVEL CHANNEL LATIN AMERICA: Landmark Communications Inc., the Norfolk-based media company, has sold Travel Channel Latin America to Discovery Communications.

Terms of the deal were not disclosed by the privately held concerns.

Landmark last year said it would divest its Travel Channel Networks because it lacked the leverage to expand distribution and reduce costs. In July, it sold the U.S. Travel Channel to Paxson Communications, a Florida-based media company. Subsequently, Discovery agreed to acquire 70 percent of the U.S. channel from Paxson.

BANC ONE BUYS FIRST COMMERCE: Banc One Corp., the nation's eighth-largest banking company, is acquiring First Commerce Corp. for approximately $3 billion in stock in a deal that would create the largest bank in Louisiana.

Banc One, based in Columbus, Ohio, already operates in Louisiana as a result of the 1995 acquisition of Baton Rouge-based Premier Bancorp.

KINDER MORGAN TO BUY SANTA FE PIPELINE: Kinder Morgan Energy Partners L.P. said Monday it agreed to buy Santa Fe Pacific Pipeline Partners L.P. for about $1 billion in cash and stock. Kinder Morgan, based in Houston, is a pipelines and coal-transfer company controlled by former Enron Corp. president and chief operating officer Richard D. Kinder.

MEMO: The Associated Press and staff writer Tom Shean contributed to

this story.

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