CBS gives up QVC merger as cable company steps in

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The Independent Online
CBS will no longer pursue merger talks with QVC Network, the chief executive, Laurence Tisch, said yesterday. His decision followed Tuesday night's dollars 2.2bn (dollars 44 a share) bid for QVC from one of its own minority shareholders, the Philadelphia-based cable operator, Comcast Corporation.

At the same time Barry Diller, the QVC chief executive for whom the Comcast intervention has come as a personal blow, said that QVC would consider the Comcast offer with other options. Yesterday the QVC board authorised management and advisers to negotiate with Comcast, the third- largest US cable operator.

CBS moved quickly yesterday morning in announcing a dollars 325 cash tender offer for up to 3.5 million of its own shares. The dollars 1.1bn offer, funded from CBS cash reserves, was designed to protect its own share price from a possible fall, while also realising cash for its shareholders, including Mr Tisch himself - he owns 20 per cent of CBS via his Loews Corporation.

Investors were taken by surprise by the bid from Comcast, which owns 15.5 per cent of QVC and had been expected to go along with the CBS merger, valued at dollars 38 a share for QVC shareholders and masterminded by Mr Diller, the former Hollywood executive.

Jessica Reif, analyst at stockbroker Oppenheimer & Co, said that Comcast would probably have to increase the value of its offer to win acceptance from QVC shareholders. She added that if the Comcast bid succeeded, 'I can't believe that Barry Diller will stay at QVC'.

Last year Mr Diller and QVC lost to Viacom in a protracted takeover battle for Paramount Communications. Now Mr Diller has found one of his own partners at QVC thwarting his ambition to make a triumphant return to the mainstream entertainment business.

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