‘House to sell by room

NEW YORK — Westinghouse Electric Corp. is abandoning plans to spin off its industrial assets and instead will sell the remaining units piecemeal, fulfilling the company’s quest to become a standalone media entity.

Westinghouse today is expected to announce the sale of its power generation unit to one of several European bidders, and will sell its defense contractor business in coming weeks, perhaps by year-end, sources said.

The decision to abandon the spin-off comes as good news to media-focused investors, who would rather receive cash from the sale of the industrial units than get low-priced stock in a new Westinghouse Electric industrial company, which many would wind up selling later, with tax consequences.

“This is a media company, but there’s this whole industrial segment that’s confusing people,” said John Tinker, a Montgomery Securities analyst. “This tidies it up and moves it off the books.” The surviving media company will be renamed CBS Corp., maintaining its current management.

Only two weeks ago, Westinghouse CEO Michael Jordan emphatically denied plans to do exactly what he’s expected to announce today. “We’re going ahead with a spin-off; we have no plans at this point to sell anything,” he said, when asked about the rumored sales.

Following the earlier $2.5 billion sale of Thermo King, whose proceeds were used to fund the buyout of American Radio Systems in September, Tinker conservatively estimates the remaining asset sales will net shareholders $1 billion, or $1.50 a share, with the price reduced by buyers’ assumption of liability claims, particularly in the nuclear power business.

That unit became more attractive to buyers when the Chinese government announced plans to open its market to U.S. nuclear power equipment.

Westinghouse shares closed Wednesday down 19¢ to $27.88 amid sharp declines in the overall market. The company will report third-quarter earnings today that are expected to include improved performance by the CBS network and TV station group.

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