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National Media rejects ValueVision tender offer

National Media Corp. decided Friday that ValueVision Intl.’s tender offer was too small and tossed it back, hoping a bigger fish will approach the direct marketer.

As expected, the board authorized National Media and advisers UBS Securities to consider all options to maximize value, such as talks with all interested partial or wholesale bidders, including ValueVision.

National Media chairman John Turchi called ValueVision’s unsolicited offer of $ 10 per share for 50.1% of the Philadelphia-based company “financially inadequate” and “highly coercive.”

So-called “coercive” tender offers cash for the first portion of shares received — enough to provide the buyer a majority — and securities for the remainder, prompting shareholders to rush into it and tender for cash for fear of getting stuck in the second portion with securities of questionable value.

“The tender has many significant conditions,” Turchi wrote ValueVision chief exec Robert Johander. “Simply put, ValueVision does not have the money to pay for the shares it seeks in its tender offer.”

On Jan. 13, ValueVision offered $ 10 in cash for the first 50.1% of National Media’s almost 12 million shares, with the remainder to be converted into ValueVision Class A common stock with a market value of $ 10 per share. It also said it had acquired 9.8% of National Media shares outstanding.

Although National Media’s board rejected ValueVision’s offer and recommended that shareholders not tender, the home shopping channel will keep the offer open until March 7 and see how many shares it receives.

National Media shares closed Friday up 13 cents at $ 10.88 per share — almost $ 1 above the tender price. ValueVision stock also gained 13 cents to settle at $ 9.50 per share.

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