Par board ponders bid

The Paramount board of directors is expected to meet today and there is speculation it could approve Viacom’s revised bid.

While that bid is still valued less than QVC’s in terms of overall value, some on Wall Street say they prefer it because of its higher cash portion –$ 107 cash for 50.1% of Paramount shares vs. QVC’s $ 92 cash for 51% — and backend collar that helps protect the value of the stock portion of the bid. Sources said the board may be looking for QVC to include similar backend provisions in its bid.

Based on Thursday night’s closing prices, S.G. Warburg analyst Lisbeth Barron valued QVC’s bid at $ 85.54 per share, or $ 10.1 billion, compared to Viacom’s offer, which stands at $ 82.92, or $ 9.8 billion.

It’s unclear whether QVC topper Barry Diller will return to the bargaining table, after making statements last week that “he was finished” barring unforeseen circumstances. If he does, some predict he will wait until closer to the Feb. 1 deadline to do so. “What’s the upside for him to come back sooner than he has to?” questioned an arbitrager who has been active with the stocks.

Both tender offers are scheduled to expire at midnight Jan. 31. If either offer is revised before that date, the bidders will be given one last crack to modify their bidsFeb. 1, the final deadline for offers established by the Par board so the offers can close by Feb. 14.

Separately, Viacom said it will demand the $ 100 million termination fee that was a part of its original merger agreement with Par, which was terminated Dec. 22. But Viacom said it will not seek payment in a manner that would interfere with the ongoing bidding process. Paramount would not comment.

Speaking at Brandeis U. in Waltham, Mass., Viacom chairman Sumner Redstone said the value of the stock portion of either current bid for Paramount can’t be measured by current stock prices. “If QVC gets Paramount, where will its stock be in three months? You can’t sell it right away,” Redstone said.

“Anyone who knows the stocks of QVC and Viacom knows they don’t trade at intrinsic value.

“Since cash is certain, we think we have a very powerful bid on the table,” he said. “I have no idea what Diller will do.”

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