Viacom Decides Not to Sell Spelling Entertainment
NEW YORK (AP) _ Nine months after it decided to sell Spelling Entertainment Group, Viacom Inc. has pulled the producer of ``Melrose Place″ and ``Beverly Hills 90210″ off the auction block.
Viacom, which owns MTV, VH-1, Paramount Pictures and Blockbuster Entertainment, announced Tuesday it would hold onto the film and television producer after failing to receive an adequate offer.
When Viacom announced last August it was putting Spelling up for sale and had hired the Wall Street firm Bear, Stearns & Co. to find buyers and help evaluate offers, industry analysts felt certain there would be no dearth of bidders for the company.
Spelling has a long history of prime-time success, dating back to ``The Love Boat,″ ``Fantasy Island″ and ``Dynasty.″
But apparently nothing panned out as the sale effort progressed. Viacom did not discuss any offers in a statement from chairman and chief executive Sumner Redstone announcing the decision.
The statement paraphrased Redstone, who made the announcement at the Spelling annual meeting in Los Angeles, as saying Viacom would not pursue the sale because it ``did not receive an offer that satisfactorily reflected Spelling’s value and long-term growth potential.″
Redstone said Viacom would retain control of computer game developer Virgin Interactive Entertainment, which is owned by Spelling. Its titles include ``The 11th Hour″ and ``The 7th Guest.″
``We are very thrilled and happy to remain a member of the Viacom family,″ Spelling Entertainment vice chairman and founder Aaron Spelling said in a statement.
Viacom, which is based in New York, took control of Spelling through its 1994 purchase of Blockbuster. The remainder is owned publicly and trades on the New York Stock Exchange.
Viacom did not divulge the price sought for Los Angeles-based Spelling. Based on Spelling’s stock price Tuesday, the company’s market value is $807 million. The day the proposed sale was announced, Aug. 10, 1995, Spelling was worth about $300 million more.
Viacom’s purchases of both Blockbuster and Paramount have left it with $10.8 billion in long-term debt, and at least some proceeds from a Spelling sale would have gone to pay it down. Redstone has stated recently that Viacom is looking to reduce its debt burden.
Toward that end, the company has already sold Madison Square Garden and its interest in the Lifetime cable television network. Viacom also is looking to divest its local cable television systems.