Bid target Paramount lurches into red

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The Independent Online
NEW YORK - A day after rival bidders submitted final dollars 10.4bn tender offers for Paramount Communications, the media conglomerate warned that it expects to post a loss for the quarter that ended on Monday, writes Larry Black.

Paramount said it would lose dollars 35m to dollars 40m ( pounds 23m to pounds 27m), the result of an unexpected write-down on its Christmas film, Addams Family Values, and poor ratings at a cable television network it co-owns with MCA.

The evidence of deteriorating results comes as traders and investors who own Paramount are evaluating competing tender offers from Viacom and QVC Network. Both made last-minute adjustments to their two-stage tender offers just before Tuesday's bidding deadline, with QVC offering more of its payment in cash, and Viacom addressing concerns about a slide in the value of its securities.

Although QVC's final offer appeared to be worth slightly more - about dollars 86 a share versus dollars 83 - traders were yesterday favouring Viacom's more secure package. The promise of a more immediate payoff means that arbitrage traders, who are believed to hold a majority of Paramount shares, will probably prefer Viacom between now and the 14 February deadline.