QVC Raises Bid for Paramount
NEW YORK (AP) _ QVC Network Inc. raised the stakes Friday in its hostile bid for Paramount Communications Inc., offering $90 a share for a controlling interest in the moviemaking and publishing company.
The new bid tops by $5 a share the latest offer from Viacom Inc., Paramount’s chosen merger partner, and is $10 a share more than QVC’s earlier offer.
QVC had been expected to raise its bid after its successful recruitment Thursday of a new deep-pocketed partner, BellSouth Corp.
QVC said it would pay $90 a share in cash for 51 percent of Paramount’s shares and exchange stock for the remainder. It said the new bid was worth about $10.6 billion at Friday’s closing prices.
Viacom is offering $85 a share in cash for the 51 percent stake and stock for the remaining 49 percent of Paramount’s shares. That translates to a $10.1 billion total price tag.
Paramount stock rose 50 cents a share to $83 on the New York Stock Exchange Friday. The higher QVC bid was announced after the close of trading.
Viacom and Paramount had no immediate comment on the new offer.
Earlier Friday, Viacom had said it had obtained bank financing commitments that will cover the costs of its merger with Paramount.
Lizbeth Barron, analyst for the investment firm S.G. Warburg, said she suspects investors will prefer the QVC offer to what Viacom has offered because it contains more cash - $5.5 billion under the QVC bid to $5.2 billion under Viacom’s offer.
She said she thinks Viacom has already put its best bid on the table and will not raise it.
That will put the Paramount board on the spot in deciding whether to drop its support for Viacom, which would stand to get millions in payments if Paramount ends up merging with someone else.
QVC, headed by onetime Paramount Pictures boss Barry Diller, had been under pressure to raise its previous offer since last weekend, when Viacom raised the cash portion of its bid to $85 a share.
But a higher bid alone won’t ensure that the West Chester, Pa.-based home shopping channel will win Paramount.
It is still seeking regulatory clearance for its bid, and has asked the Chancery Court in Delaware to nullify antitakeover defenses that Paramount can employ to make it much more expensive for an unwanted suitor to buy the company.