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WESTINGHOUSE/CBS DEAL MAY COME TODAY; IS NET MORE DESIRABLE?
Published August 1, 1995
Westinghouse Electric is expected to announce today an agreement to purchase CBS at $81 a share or about $5B, "people familiar with the transaction" told this morning's WALL STREET JOURNAL. Seven Lipin and Elizabeth Jensen report that "the boards of the two companies are scheduled to meet this morning to vote" on the deal, with an announcement expected today (WALL STREET JOURNAL, 8/1). HOLD EVERYTHING! After yesterday's Cap Cities/ABC- Disney merger, speculation "has intensified" that another company, such as a Hollywood studio, might try to outbid Westinghouse. The Disney-ABC deal "could well raise the value of media properties, such as networks." Even Cap Cities/ABC Chair Thomas Murphy "quipped yesterday" that the merger of his company with Disney means that CBS Chair Laurence Tisch probably "can get more for his company today." Shares of CBS jumped $1.88 to $77.15 on news of yesterday's Disney/ABC deal (WALL STREET JOURNAL, 8/1). John Durie writes in this morning's N.Y. POST, "If the likes of Ted Turner and Edgar Bronfman Jr. at Seagram were thinking about buying a television network, yesterday's deal raises the urgency" (N.Y. POST, 8/1). Susannah Patton of DOW JONES NEWS SERVICE writes, "CBS Inc. suddenly looks a lot more popular." Patton notes that while Disney can provide programming for ABC, "Westinghouse would only add distribution to CBS," making "potential bidders that could provide programming" more likely "to jump into the bidding arena." Patton also mentions Bronfman's Seagram Co. and Turner, along with Viacom, Time Warner/TCI and Barry Diller as potential suitors (BOSTON GLOBE, 8/1). Turner is said to be close to a deal with King World Productions, "which has enough cash on hand to allow Turner to proceed to buy CBS," (Claudia Carpenter, N.Y. POST, 8/1). PEACOCK BACK IN PLAY? The N.Y. POST's Durie also writes that yesterday's deal could potentially land NBC on the market. Durie: "Jack Welch at General Electric may also consider selling NBC if this deal sets off a bidding war for the newly "scarce' television networks" (N.Y. POST, 8/1). Dillon Read analyst Edward Atorino also notes the possibility of an NBC sale. Atorino: "Welch may be saying that broadcasting isn't such a big part of the business. He may unlock NBC" (BOSTON HERALD, 8/1). MOVEMENTS BY FOX TOO? CNN's Steve Young: "Some analysts say the Disney deal will also push Rupert Murdoch to expand using a recent $2 billion MCI investment in his News Corp. empire" ("Moneyline," CNN, 7/31). OTHER NBC NEWS: NBC has apparently offered to buy Outlet Communications -- the owner of several NBC affiliates -- for more than $396M, according to this morning's N.Y. TIMES. The bid would renew a bidding war with Renaissance Communications, which offered $360M for Outlet in late June. Renaissance, which owns several top-50 Fox affiliates, responded to NBC's bid by suing both companies. A hearing is scheduled for today (N.Y. TIMES, 8/1).