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Crafting an empire

CBS sets vote on merger, includes KW holders

CBS Corp. Friday set a new, Nov. 17 date for a special shareholder meeting to approve its merger with Viacom in order to include holders of King World Prods., who will vote Nov. 15 on that company’s sale to CBS. King World had originally scheduled a vote on its merger for Sept. 7 but postponed the meeting to digest info on the larger CBS/Viacom deal.

The three companies will form a media and entertainment powerhouse, and rumors continue to circulate that the trio could be joined by Chris-Craft, owner of 10 TV stations and Viacom’s 50% partner in the UPN weblet. Insiders insist no deal is imminent — most certainly not before the various scheduled shareholder meetings.

Chris-Craft has been in discussions with a number of big media companies interested in expanding their broadcast holdings, especially since government regulators ruled in August to allow duopoly — owning two TV stations in one market — under certain conditions.

Execs at News Corp. recently stated flat out that Fox isn’t currently in talks with Chris-Craft, and Disney’s Michael Eisner said last week he plans to avoid high-priced broadcasting acquisitions.

That would most definitely describe any takeover of Chris-Craft. In fact, some reports say CBS may have offered $85 a share for the company–nearly $10 above its current price. Thanks to months of takeover speculation, it’s more than double where the stock was trading last spring, when it hit a 52-week low of about $40 a share.

A combined CBS/Viacom would already be over the 35% national coverage cap imposed on broadcasters. Viacom chief Sumner Redstone and CBS CEO Mel Karmazin said Thursday they don’t expect the FCC to loosen the 35% rule before their deal closes. But they believe they can shrink their combined 38% footprint by swapping stations to create duopolies.

They also said they are optimistic about being able to retain UPN, despite the current prohibition against owning more than one broadcast network. Many Wall Streeters have said they expect the FCC, which wants UPN to survive, to grant a waiver to that rule.

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