The ruling surprised the market, and following an early afternoon trading halt investors scrambled to acquire Paramount shares in anticipation of a further round in the bidding war, sending them soaring by dollars 4 to dollars 80.25.
The Paramount board has been pursuing a friendly merger with Viacom, whose businesses include MTV and the Nickelodeon children's cable channel, and had put in place a number of provisions, including a 'poison pill' that would make a hostile takeover prohibitively expensive. Judge Jack Jacobs threw out the most important of these, creating more of a level playing field for the two competing offers, and making it more likely that Viacom will have to offer more money to see off QVC.
Paramount said it would appeal.
The Paramount board has been trying to ignore the hostile QVC offer, arguing that the link with Viacom makes more strategic sense. Both Viacom and QVC have two-step tender offers pending for Paramount shares, offering cash for 51 per cent of the shares, to be followed by a cash and stock offer for the balance.Reuse content