Newspaper article St Louis Post-Dispatch (MO)

CBS Accepts Buyout Offer Westinghouse Corp. Bids $5.4 Billion for Network

Newspaper article St Louis Post-Dispatch (MO)

CBS Accepts Buyout Offer Westinghouse Corp. Bids $5.4 Billion for Network

Article excerpt

CBS Inc. agreed Tuesday to give up its nearly 70-year legacy of corporate independence, embracing a $5.4 billion buyout offer from the broadcasting and industrial conglomerate Westinghouse Electric Corp.

Speculation immediately arose that CBS might attract a higher bid before Westinghouse can close the purchase, particularly because of newfound appreciation for the value of the Big Three broadcast networks.

The CBS deal was announced only a day after Capital Cities/ABC Inc., the larger and more diversified owner of the ABC television network, agreed to be acquired by the Walt Disney Co. for $19 billion.

But Westinghouse and CBS officials said they were a good match that will create an unrivaled collection of 15 television stations and 39 radio stations, including KMOX-AM and KLOU-FM in St. Louis.

They said they expected the deal to close by early next year.

"I think this deal will happen as announced, and I think that what we will end up with is a wonderful broadcasting company for the future," said Laurence A. Tisch, the chairman and chief executive of CBS.

Tisch and his family control the biggest CBS voting block, about 18 percent, and stand to make more than $900 million on selling their stake.

The deals attest to the continued vitality of the broadcast TV networks for distributing news and entertainment and helping advertisers reach a wide audience.

The jockeying for network ownership has intensified as regulations have fallen that have kept program distributors separate from program producers. Congress is also considering legislation to let companies own more broadcast outlets than they can now.

Only a few years ago, some observers said the networks were dinosaurs that would wither in the face of competition from cable networks, home videos and other media targeted to personal tastes.

But while the three major networks - ABC, CBS and General Electric Co.'s NBC - have lost their near-total grip on the TV audience in recent years, they continue to attract more than half of it on average during the prime-time hours.

Michael H. Jordan, chairman and chief executive of Westinghouse, said the deal combines "two of the greatest American business franchises."

"We are out to create a premier broadcasting company not only here in the United States but around the world," he said at a news conference.

He said the company would aggressively examine all its options for growth, including expanding into cable networks and in international markets.

Jordan will be chairman and chief executive of the new company that will be known as Westinghouse/CBS. No role was outlined for Tisch.

Tisch, who became a CBS shareholder in 1985 after cable mogul Ted Turner made an ill-fated run at the company, presided over the sale of major CBS assets such as its music business and its magazine publishing operations and focused nearly exclusively on its core broadcast business. …

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