No winner yet in Par war

The last shots may have been fired in the war for Paramount Communications, but a victor has yet to emerge from the field of battle.

While both Viacom and QVC made sweetened “final” offers Tuesday, Wall Street sources were reluctant to speedily declare a winner. That’s because the complicated bids appear very close in value and both Viacom and QVC can be expected over the next two weeks to pull out all the stops selling the merits of their offers to shareholders.

“There is no clear winner, and this is not over because these bids are virtually identical in value,” said Oppenheimer analyst Jessica Reif. While she valued QVC’s bid at $ 86.35 per share, or $ 10.2 billion, and Viacom’s at $ 82. 65 per share, or $ 9.8 billion, based on Tuesday’s closing prices, other analysts said the gap was even narrower. But all agreed that trading in the stocks over the next few days can be expected to wipe away any difference in values. “The stock of any per-ceived winner can be expected to drop,” she noted.

Thanks to the new bidding, a clear winner now might not emerge for another two weeks. And while both Viacom and QVC seem to have adhered to the board’s rules in this latest round of bidding, some believe the dueling isn’t over yet despite Tuesday night’s board-imposed deadline.

“You can still bypass this auction process by going directly to the shareholders,” said money manager Mario Gabelli, whose funds represent one of Paramount’s largest ownership stakes. “The preponderance of the probability is that you’ve still got one more wave of bidding.”

Just wishful thinking?

But other Wall Street sources said given the already heady level of bids and the fatigue that has set in on both bidders and target, another round of bidding in the 4 1/2-month-long contest was probably just wishful thinking on the part of shareholders like Gabelli. Such a move might also send the matter back to the Delaware courts.

In a release, Viacom said it anticipates no further bidding by either Viacom or QVC. QVC did not include such a statement in its release. Neither Viacom chairman Sumner Redstone nor QVC chair Barry Diller could be reached for comment.

Valentine deadline

Both Viacom and QVC Tuesday extended their tender offers so that they now expire at midnight on Feb. 14. Each company has until then to try and garner the 50.1% of Paramount shares needed to be declared a winner.

The winning offer would then have to remain open another 10 business days, until March 1, so that all shareholders would have ample time to tender into the winning bid.

If neither company can gain the needed 50.1% by Feb. 14, the board could be forced to reopen the auction, a development one large shareholder described as his “worst nightmare.” The increased bids were announced after the Tuesday market’s closing bell. Prior to that, nervousness over the fact that QVC gave no indication that it was raising its bid affected stock prices: Paramount gained 25 cents to close at $ 79.875. Viacom’s Class B shares plunged $ 1.125 to close at $ 34.125, while QVC gained 75 cents to close at $ 44.75.

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