You will be redirected back to your article in seconds

Shareholders on hold

While Wall Street continues to keep a vigil waiting for a clearer indication of a winner in the ongoing battle for Paramount Communications, financial sources said the auction process is still in its early stages.

While Paramount’s board met for more than six grueling hours Tuesday trying to decide which offer it will recommend to shareholders, the board recessed until today without taking action. But sources said even when the board gives its recommendation, it may prove nothing more than a prelude to a rejoined bidding war.

“Even if the board recommends one bid over another, the offers have to stay open for another 10 days, and that’s plenty of time for the low bidder to come back to the table with a higher offer,” noted one large Paramount shareholder. “There’s really no good reason for them to hurry and do that right away.”

QVC announced late Monday night that it had raised the cash portion of its offer by just $ 2 a share, or $ 100 million. Even so, that offer was said to top Viacom’s latest bid (Viacom still has not commented on its offer).

“They’re still feeling each other out,” the source said. “The investment bankers will work them over for the next couple of days, and then we’ll see some increased bids.” For that reason, some are predicting the Paramount auction will still be going on well after the holidays are over.

Sources said both Viacom and QVC have been in negotiations with their respective backers about raising their bids. QVC’s strategic partner BellSouth was said to be more than willing to help in significantly upping QVC’s bid, but Diller convinced the company to follow what appears to be a wait-and-see approach.

The lack of substantially higher bids sent Paramount’s stock tumbling Tuesday; it lost $ 1.63 to close at $ 80.38. QVC dropped $ 1.50 to $ 42. Viacom’s Class A shares slid 63 cents to $ 49.88 while its Class B shares inched down 13 cents to $ 45.13.

While arbs and money managers are eagerly awaiting higher bids, a number of Wall Street analysts have downgraded Paramount’s stock, saying that at 25 times 1993 cash flow, it’s astoundingly overpriced.

Even so, with the personalities involved, most believe there will be at least one more volley before a winner emerges.

“Someone could just get completely fed up and drop out,” one market veteran said. “But with Sumner Redstone and Barry Diller (the respective chairmen of Viacom and QVC) in as deep as they are, we really may be in for a duel to the death.”

More Biz

  • Manuela Herzer

    Manuela Herzer Cites CBS-NAI Fight in Renewed Bid for Sumner Redstone Competency Ruling

    While Wall Street continues to keep a vigil waiting for a clearer indication of a winner in the ongoing battle for Paramount Communications, financial sources said the auction process is still in its early stages. While Paramount’s board met for more than six grueling hours Tuesday trying to decide which offer it will recommend to […]

  • A trading post sports the Spotify

    Sony Music's $750 Million Spotify 'Windfall' Leaves Some Lingering Questions

    While Wall Street continues to keep a vigil waiting for a clearer indication of a winner in the ongoing battle for Paramount Communications, financial sources said the auction process is still in its early stages. While Paramount’s board met for more than six grueling hours Tuesday trying to decide which offer it will recommend to […]

  • Harvey Weinstein, with his attorney Benjamin

    Harvey Weinstein's Attorney Blasts Asia Argento's 'Hypocrisy'

    While Wall Street continues to keep a vigil waiting for a clearer indication of a winner in the ongoing battle for Paramount Communications, financial sources said the auction process is still in its early stages. While Paramount’s board met for more than six grueling hours Tuesday trying to decide which offer it will recommend to […]

  • Asia Argento arrives for the screening

    Asia Argento Is Not Facing Sexual Abuse Investigation

    While Wall Street continues to keep a vigil waiting for a clearer indication of a winner in the ongoing battle for Paramount Communications, financial sources said the auction process is still in its early stages. While Paramount’s board met for more than six grueling hours Tuesday trying to decide which offer it will recommend to […]

  • Rose McGowan Asia Argento

    Rose McGowan on Asia Argento Accusation: 'My Heart Is Broken'

    While Wall Street continues to keep a vigil waiting for a clearer indication of a winner in the ongoing battle for Paramount Communications, financial sources said the auction process is still in its early stages. While Paramount’s board met for more than six grueling hours Tuesday trying to decide which offer it will recommend to […]

  • Actress Asia Argento speaks about being

    Asia Argento Settled With Sexual Assault Accuser Last Year (Report)

    While Wall Street continues to keep a vigil waiting for a clearer indication of a winner in the ongoing battle for Paramount Communications, financial sources said the auction process is still in its early stages. While Paramount’s board met for more than six grueling hours Tuesday trying to decide which offer it will recommend to […]

More From Our Brands

Access exclusive content