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Viacom likely Par winner

Sumner Redstone seemed poised Monday night to win the war for Paramount Communications Inc. despite a last-minute effort by Barry Diller. While no official numbers were available late in the day, Wall Street confidently forecast Viacom would win by a sizable margin.

Both tender offers expired at midnight Eastern time. Under the old bidding rules, if neither party received 50.1%, both could change their bids. But sources have recently said the studio’s board of directors, which was expected to meet very early today, could use its discretion if one party had a solid majority but not 50.1%.

QVC topper Barry Diller asked the Par board Monday morning to reconsider its endorsement of Viacom. After the market closed, Paramount released a letter from its counsel to QVC’s lawyer affirming Viacom’s endorsement by Par’s bankers, Lazard Freres.

Never an easy answer

Nothing about the five-month-long takeover war has been simple, not even that minor development.

Earlier, several wire services had reported Paramount refused to reconsider, but a Par spokesman later said the unidentified employee quoted in those reports did not speak for the company.

Diller’s solicitation surprised many after a statement he issued Sunday appeared to indicate a graceful exit from the fray.

That seemed to many an ideal resolution for the well-reputed manager, given Paramount’s inflated purchase price, waning fortunes and fears that the studio will suffer a flood of departures regardless of who wins.

QVC’s decision Sunday not to raise its bid ended speculation that it might do so if enough investors held on to shares at the deadline, preventing Viacom from getting 50.1% and renewing the bidding.

Reports of those hints last week triggered a barrage of accusations and inquiries from Viacom and Paramount about QVC’s compliance with U.S. securities laws.

Legal reps said Sunday’s pledge gave QVC some defense against a lawsuit if Viacom did not receive 50.1% of Par’s outstanding stock and blamed it on the leaks.

A mostly done deal

Still, as far as most of Wall Street was concerned, Sunday’s statement pretty much sealed QVC’s fate. But since this deal has taken a longer, more tortuous route than anyone originally imagined, no one will rule out the potential for further developments.

Shares of Viacom and QVC moved Monday as they have for several weeks, with sentiment pointing to Viacom as the likely winner. The cable programmer’s stock fell $ 1.75 per share to $ 29.88 and its bid was valued at $ 81.03. QVC shares added $ 1.63 to $ 48.50 per with its bid valued at $ 87.61 per. Par shares dropped 75 cents to $ 76.13.

Viacom offered $ 107 per share in cash for 50.1% of Par’s outstanding common stock plus a package of securities with some price protection if its stock is trading at $ 36 or above. QVC offered $ 104 per share in cash for 50.1% of Par plus a package of securities with no price protection.

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