Westinghouse Gets Financing for CBS Purchase
NEW YORK (AP) _ Westinghouse Electric Corp. has signed loan agreements for its $5.4 billion purchase of CBS Inc., beating deadlines set in the buyout pact for arranging financing for the deal.
The Pittsburgh-based broadcasting and industrial company still must get approval from the Federal Communications Commission and CBS shareholders for
The Justice Department failed to raise antitrust objections and let a deadline pass for moving to block the deal. CBS owns the CBS television network as well as TV and radio stations. Westinghouse owns TV and radio stations.
Westinghouse announced the buyout pact on Aug. 1 and had been seeking financing for the cash offer of $81 a share and for refinancing existing debt.
In just over a month, the company was offered loan commitments of about $14.4 billion for the deal, well in excess of what it needed.
On Tuesday, the company signed loan agreements for $7.5 billion from a group of 50 banks led by Chemical Banking Corp. and J.P. Morgan & Co.
The banks are earning fees of about 2 percent of the loan commitments and interest rates of 1.75 percentage points over certain open-market bank rates. The loans are generally for seven years.
``We found a very receptive financial market for this transaction,″ Claudia Morf, Westinghouse’s vice president and treasurer, said Wednesday.
She said the terms offered were ``attractive″ but said the commitment levels indicated the banks felt Westinghouse can make the purchase work.
``When banks are making commitments of this size, no bank is going to sign up and commit their institution unless they are comfortable with the deal,″ she said.
Westinghouse had been given until Oct. 4 to get definitive financing agreements in place, so it beat that deadline by about three weeks.
The deal is also subject to review by the FCC because it involves the transfer of broadcasting licenses. Three groups have filed in opposition to the deal, saying Westinghouse stations haven’t shown enough children’s programming.