HSN sticks to stock

Cash off the table in Ticketmaster buyout

NEW YORK — Barry Diller’s HSN Inc. on Friday withdrew the cash alternative in its $300 million offer for the outstanding 49.9% of Ticketmaster Group Inc., just as Ticketmaster appointed a special committee of directors to review the bid.

Both moves are likely to raise questions from Ticketmaster shareholders and could lead to pressure for a higher price.

Not only is HSN’s offer now worth less, but the two “independent” directors reviewing the bid, Viacom Inc. entertainment group chairman Jonathan Dolgen and former Liberty Media CEO Peter Barton, both joined the board as “outside directors” nominated by HSN.

Dearth of directors

Ticketmaster declined comment, but people close to the situation said there were no other directors available to serve on the committee. Sources noted that the main analysis is done by an investment banker hired by the special committee.

Meanwhile, the investment banker’s job will be somewhat simpler following HSN’s change to the offer. Instead of offering Ticketmaster shareholders a choice of $25 a share in cash or stock whose value would fluctuate around $22-$23 a share, HSN now is offering only stock.

The change came only eight days after HSN, which already owns 50.1% of Ticketmaster, announced the offer. That period has seen extreme volatility on the stock market and HSN’s stock price has fallen from $44.56 the day the offer was made to Friday’s close of $40. At that price the offer is worth $22.264 a share.

Prices in flux

Ticketmaster’s stock price also has dropped; from $23.50 the day of the offer to below $23, although it rose 37¢ Friday to close at $23.12.

HSN made the change very quietly, saying in a statement that it advised Ticketmaster’s special committee “to consider only” the stock proposal. It said nothing about the cash offer and an HSN spokeswoman declined further comment. But sources said the form of the original offer was confusing.

Still, the change is sure to create pressure from some public shareholders for a higher price.

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