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NET NEWS: WESTINGHOUSE SELLING THE FARM TO BUY THE RANCH?
Published July 25, 1995
Westinghouse Electric Corp., "in need of cash to finance a widely expected $5 billion takeover of CBS Inc.," agreed yesterday to sell its real estate unit in a $556M deal, according to REUTERS. The sale of the real estate unit, Westinghouse Communities Inc., should help the company in its CBS bid, but analysts say they may have to sell off other units, including defense electronics, refrigeration and/or power generation (REUTERS/DAILY VARIETY, 7/25). USA TODAY reports, even as the real estate sale was improving Westinghouse's cash standing, "investor's began to question the [CBS] deal's prospects." Others still predict that other players -- Ted Turner, Disney, Seagram's, Viacom --will enter a bidding war for CBS once the network is put into play, although there is still "no evidence" of anyone making another bid (Lieberman & Henry, USA TODAY, 7/25). In Boston, Fredric Biddle writes, "Any number of ploys worthy of J.R. Ewing and Machiavelli could make Turner or Seagram a CBS player" (BOSTON GLOBE, 7/25). Analyst Nicholas Heymann, of County NatWest, said Westinghouse needs an "equity partner," such as Seagram's to manage the network and sell investors on the deal (ELECTRONIC MEDIA, 7/24 issue). But BROADCASTING & CABLE reports that Westinghouse is still planning a "solo bid," but could take on minority partners "to reduce debt after the deal is done" (B&C, 7/24 issue). CAP CITIES/ABC EARNINGS REPORT: Captial Cities/ABC's 2nd quarter earnings "failed to meet analyst expectations because of rising newsprint costs and increased payments to its affiliated television stations," according to BLOOMBERG BUSINESS NEWS. Net income rose 10% to $208.9M or $1.36 a share, from $189.5M or $1.23 a share. Analysts had expected a jump to $1.40 a share. Revenue increased 7.2% to $1.65B. The broadcasting group had an operating profit of $322M, up 4.8% from a year ago. ESPN reported "significant gains, the company said, without elaborating" (N.Y. TIMES, 7/25). The WALL STREET JOURNAL cited strong ad demand which boosted the results and led to ABC's 10% income gain (Elizabeth Jensen, WALL STREET JOURNAL, 7/25). The N.Y. POST noted that Cap Cities/ ABC stock "fell sharply" -- down 3 7/8 to 97 3/4 -- upon release of the report (Greg Clarkin, N.Y. POST, 7/25). DONE DEAL: Gannett, publisher of USA Today, said yesterday that it will purchase Multimedia Inc. for $1.7B. Multimedia is best known as syndicator of such TV shows as Donahue, Sally Jesse Raphael and Rush Limbaugh. But the company's holdings also include radio and TV stations and cable TV outlets. In Washington, Paul Farhi writes the deal "will allow Gannett to compete more aggressively against the emerging handful of media giants," such as Time Warner, News Corp. and Viacom (WASHINGTON POST, 7/25). FOX TO GET FCC O.K.: FCC sources tell ELECTRONIC MEDIA that the agency's staff is recommending that Fox's foreign ownership be officially approved at the FCC's July 28 meeting (Doug Halonen, ELECTRONIC MEDIA, 7/24 issue).