Viacom wins at Paramount: Cable group trumps QVC's hostile bid by securing support of 75 per cent of shareholders

ONE of the longest and most expensive takeover battles on Wall Street ended yesterday when a majority of Paramount shareholders tendered their shares to a dollars 9.7bn offer from Viacom, the cable group.

Viacom said that almost 75 per cent of Paramount shareholders had backed its bid and that it would extend its offer until 1 March to allow those that had supported a rival bid by QVC, the cable-shopping network, to cash in their shares. QVC said only that its offer had not attracted the minimum condition, and terminated its bid.

'They won. We lost. Next,' said QVC's chief executive, Barry Diller.

Viacom and Paramount chief executive Martin Davis had agreed a price of dollars 7.4bn for the studio-and-publishing conglomerate. But a hostile bid from QVC and a court ruling forced Paramount directors to turn the sale into an auction.

Some of the largest cable and telephone companies in the US lined up on either side of the struggle for Paramount, one of the last big sources of entertainment programming not yet bound up with a large international media distributor. Fear of being deprived of a reliable source of production in the coming multimedia revolution induced backers to invest dollars 5bn in the bids, and encouraged a number of mergers within the two camps.

On the QVC side, Liberty Media merged with Tele-Communications Inc, the cable giant, which will in turn merge with Bell Atlantic. Viacom, searching for new sources of cash for the bid, announced an dollars 8.4bn merger last month with Blockbuster Video. And Paramount bought rival publisher Macmillan, a one-time Maxwell property, for dollars 552m at the height of the bidding frenzy last December.

The company that emerges from the deal will have extensive interests in cable network programming - MTV, Nickelodeon, USA Network - distribution with Viacom, and film and television production through Paramount, Republic and Spelling Entertainment. It will also have distribution in Viacom cinemas and broadcasting through Paramount stations; video and music retailing at Blockbuster; publishing through Simon & Schuster and Macmillan, and sports franchises in the New York and Florida ice hockey teams, the New York Knicks basketball teams and the Miami football and baseball franchises.

(Photograph omitted)