With BellSouth dollars, QVC is top bidder for Par
The home shopping company wasted no time in putting telco BellSouth's $ 1.5 billion cash infusion to good use -- late Friday, QVC upped its tender offer to $ 90 a share in cash and stock, $ 5 per share higher than rival Viacom's bid.
Even so, QVC made it clear that its new $ 10.6 billion offer is contingent on winning its case against Paramount and Viacom in Delaware Chancery CourtTuesday. QVC has asked the court to throw out Paramount's "poison pill" and lockup arrangements with Viacom on the grounds that they have effectively prevented shareholders from considering rival offers. Those provisions could be expected to add as much as $ 600 million to the cost of a QVC purchase.
Mergers andacquisitions experts were divided on QVC's chances for success in court, but they agreed that QVC had to have the highest bid on the table in order to convincingly argue its case.
Accordingly, some on Wall Street were expecting Viacom chairman Sumner Redstone to match or top QVC's offer. (The billionaire boldly raised the ante on Nov. 6, upping Viacom's offer by $ 5 to $ 85 a share.) But no move was forthcoming Sunday.
Viacom may be loathe to again modify its bid at this point because that would push back the Nov. 22 closing date for its offer. Under Securities & Exchange Commission rules, tender offers must remain open for at least 10 business days after being modified with regards to terms or price. QVC's tender offer is now scheduled to close Nov. 26.
But while other studios are just beginning to be talked about as potential takeover targets -- Tele-Communications Inc. topper John Malone reportedly has had discussions with the parent companies of Columbia, Universal and 20th Century Fox -- the 2-month-old battle for Paramount may be finally winding down.
"We're in the last inning and QVC is up," said money manager Mario Gabelli, whose funds are one of Paramount's largest shareholders, with a 6% stake. Such a statement is noteworthy, because institutional investors ferred stock could be exchanged for debentures, also at QVC's option, three years or more after the merger.
