City & Business: Diller in the wings

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The Independent Online
LORD WEINSTOCK, 70 later this month, has responded to the growing worry about his succession at GEC by announcing he is staying on for at least another two years. The decision settles nothing. And, as we report on page 1, some institutional shareholders are seething.

In the United States, Larry Tisch, 71, chairman and 20 per cent stakeholder of the broadcasting group CBS, wants to retire, but has a different approach to appointing a successor. He's planning to merge his old-established television group with the brash home shopping group QVC. And with QVC comes its energetic boss, Barry Diller.

Diller is something of a living legend. A college drop-out, he was running the Hollywood studio Paramount Pictures by the age of 32. It was Diller who went on to head Rupert Murdoch's 20th Century Fox, Diller who - against all odds - turned Fox TV into a network to rival the big three, Diller who astonished Hollywood by quitting (with a dollars 30m pay-off) to join unglamorous QVC, and Diller who last year launched a dollars 101 2 bn hostile bid for Paramount Communications.

'It's there. It's for sale. And I can buy it,' he said with his customary staccato delivery. Three months later, when Paramount fell to a rival friendly merger with Viacom, he was equally succinct: 'They won. We lost. Next.'

Next has now arrived in the shape of CBS. The boards of CBS and QVC are each due to meet this week to ratify the dollars 7.1bn merger. It's unlikely, but there is still time for a rival bidder to spring out. Walt Disney, Turner Broadcasting, Time-Warner and any number of phone utilities have been suggested.

The complex deal would be a terrific coup for Diller, catapulting him back into television mainstream, and putting him head to head with his old boss, Murdoch.

But if he fails with this merger, his prospects start to look less bright. QVC's reputation is plunging almost as fast as its share price, which has halved in less than a year. It has been hit by disappointing sales, high start-up costs in the UK and elsewhere and some programme flops. So far, home shopping through cable TV has not quite proved the money-spinner he hoped. 'Killer' Diller needs the CBS deal badly. I dread to think how monosyllabic he'll get if it falls through.