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WESTINGHOUSE ARRANGES FINANCING FOR CBS BID
Published July 19, 1995
Chemical Bank and J.P. Morgan have each committed $1B to Westinghouse Electric's pending bid for CBS Inc., "a sign that financing could be lined up for the expected $5 billion transaction," according to sources familiar with the situation (Lipin/Shapiro, WALL STREET JOURNAL, 7/19). The N.Y. TIMES cites a source who says that "an offer might come within the next week and that the Westinghouse board was solidly behind its chairman, Michael H. Jordan, in favoring [the] acquisition" (Geraldine Fabrikant, N.Y. TIMES, 7/19). Most articles note Westinghouse's existing $3.4B in debt as an obstacle to any deal. The L.A. TIMES notes that Standard & Poor's might consider downgarding both companies' credit ratings if they agree to merge (Sallie Hofmeister, L.A. TIMES, 7/19). NatWest Securities analyst Nicholas Heymann: "You could easily create another Time Warner - - a big thing buried under a load of debt that can't go anywhere" (David Lieberman, USA TODAY, 7/19). However, several industry sources say the "real logic of the deal" is that it "would a create the largest TV and radio group in the nation, with signals that reach about one-third of all households. A combined CBS- Westinghouse would own stations in seven of the 10 largest markets in the country -- far more than NBC, ABC or Fox (Paul Farhi, WASHINGTON POST, 7/19). WATCHING AND WAITING: The emergence of Westinghouse could "jump-start an auction for CBS" among the following players: Ted Turner, Barry Diller, Seagram's CEO Edgar Bronfman, and ITT Corp. (WASHINGTON POST, 7/19). The WALL STREET JOURNAL reports that Group W (Westinghouse's broadcasting arm) would take on a partner, with Seagram's, Chris-Craft, Turner and Disney mentioned. A spokesperson for ITT said their "plate is full," and people close to Barry Diller said his interest in CBS "has ended" (WALL STREET JOURNAL, 7/19). Turner, as quoted by SAN DIEGO UNION-TRIBUNE TV writer John Freeman on a visit to the West Coast last week: "Man, I go to bed and I wake up in the middle of the night, gritting my teeth and in a cold sweat. I beat the bed with my fists and I say, 'I gotta get me a network!'" (INSIDE MEDIA ONLINE, 7/17). EXISTING RELATIONSHIP: Group W and CBS have already launched their joint "single network sales representation firm," CBS/Group W Television Sales. All CBS reps will join the new firm as employees of Westinghouse, with separate teams serving the CBS and Group W stations and a third team serving those co- owned by both (INSIDE MEDIA ONLINE, 7/17).