<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
CBS INC.
(NAME OF ISSUER)
CBS INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $2.50 PER SHARE
(TITLE OF CLASS OF SECURITIES)
124845 10 8
(CUSIP NUMBER OF CLASS OF SECURITIES)
ELLEN ORAN KADEN
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
CBS INC.
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 975-4452
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF THE PERSON FILING STATEMENT)
COPY TO:
ROBERT A. KINDLER, ESQ.
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
(212) 474-1640
JULY 25, 1994
(DATE TENDER OFFER FIRST PUBLISHED,
SENT OR GIVEN TO SECURITY HOLDERS)
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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<S> <C> <C>
$1,137,500,000 $227,500
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*Assumes purchase of 3,500,000 shares at $325 per share.
Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number or the Form or
Schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No: N/A Date Filed: N/A
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ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is CBS Inc., a New York corporation (the
"Company"), which has its principal executive offices at 51 West 52nd Street,
New York, New York 10019 (telephone number (212) 975-4321).
(b) This Schedule 13E-4 relates to the offer by the Company to purchase
3,500,000 outstanding shares of Common Stock, par value $2.50 per share, of the
Company (the "Shares") at a price of $325 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated July 25, 1994 (the "Offer to Purchase"), and related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively. The information contained in the "Introduction", "Background and
Purpose of the Offer", Section "1. Number of Shares; Proration; Extension of the
Offer", Section "8. Purpose of the Offer; Certain Effects of the Offer" and
Section "11. Transactions and Arrangements Concerning the Shares" of the Offer
to Purchase is incorporated herein by reference.
(c) The information set forth in the "Introduction" and Section "7. Price
Range of the Shares; Dividends" of the Offer to Purchase is incorporated herein
by reference.
(d) This statement is being filed by the Issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section "10. Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in the "Introduction", "Background and
Purpose of the Offer", "Recent Developments", Section "8. Purpose of the Offer;
Certain Effects of the Offer", Section "9. Certain Information Concerning the
Company" and Section "11. Transactions and Arrangements Concerning the Shares"
of the Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in Section "8. Purpose of the Offer; Certain
Effects of the Offer" and Section "11. Transactions and Arrangements Concerning
the Shares" of the Offer to Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in the "Introduction", "Background and Purpose of
the Offer" and Section "11. Transactions and Arrangements Concerning the Shares"
of the Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section "15. Fees and Expenses" of the Offer
to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The financial information set forth in Section "9. Certain
Information Concerning the Company" of the Offer to Purchase is incorporated
herein by reference.
1
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ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in Section "12. Certain Legal Matters;
Regulatory and Foreign Approvals" of the Offer to Purchase is incorporated
herein by reference.
(c) The information set forth in Section "8. Purpose of the Offer; Certain
Effects of the Offer" of the Offer to Purchase is incorporated herein by
reference.
(d) Not applicable.
(e) Reference is hereby made to the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, and incorporated in their entirety herein by
reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
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<S> <C>
(a) (1) Form of Offer to Purchase dated July 25, 1994.
(a) (2) Form of Letter of Transmittal.
(a) (3) Form of Notice of Guaranteed Delivery.
(a) (4) Form of letter to brokers, dealers, commercial banks, trust companies and other
nominees dated July 25, 1994.
(a) (5) Form of letter to clients for use by brokers, dealers, commercial banks, trust
companies and other nominees dated July 25, 1994.
(a) (6) Form of letter to shareholders from the Chairman, President and Chief Executive
Officer of the Company dated July 25, 1994.
(a) (7) Form of letter to participants in the Company's Employee Investment Fund,
together with an instruction form from participants to Boston Safe Deposit and
Trust Company, as Trustee, dated July 25, 1994 and form of letter to
participants in the Company's Dividend Reinvestment Plan, together with an
instruction form from participants to First Chicago Trust Company of New York,
as agent, dated July 25, 1994.
(a) (8) Form of letter to holders of the Company's $10 Convertible Series B Preference
Stock dated July 25, 1994.
(a) (9) Form of Press Release dated July 13, 1994.
(a)(10) Form of Summary Advertisement dated July 25, 1994.
(a)(11) Form of Press Release dated July 25, 1994.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
2
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After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
CBS INC.
By: /s/ ELLEN ORAN KADEN
Title: Executive Vice
President,
General Counsel and
Secretary
Dated: July 25, 1994
3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------ ------------
<C> <S> <C> <C>
(a) (1) -- Form of Offer to Purchase dated July 25, 1994.
(a) (2) -- Form of Letter of Transmittal.
(a) (3) -- Form of Notice of Guaranteed Delivery.
(a) (4) -- Form of letter to brokers, dealers, commercial banks, trust
companies and other nominees dated July 25, 1994.
(a) (5) -- Form of letter to clients for use by brokers, dealers, commercial
banks, trust companies and other nominees dated July 25, 1994.
(a) (6) -- Form of letter to shareholders from the Chairman, President and
Chief Executive Officer of the Company dated July 25, 1994.
(a) (7) -- Form of letter to participants in the Company's Employee
Investment Fund, together with an instruction form from
participants to Boston Safe Deposit and Trust Company, as Trustee,
dated July 25, 1994 and form of letter to participants in the
Company's Dividend Reinvestment Plan, together with an instruction
form from participants to First Chicago Trust Company of New York,
as agent, dated July 25, 1994.
(a) (8) -- Form of letter to holders of the Company's $10 Convertible Series
B Preference Stock dated July 25, 1994.
(a) (9) -- Form of Press Release dated July 13, 1994.
(a)(10) -- Form of Summary Advertisement dated July 25, 1994.
(a)(11) -- Form of Press Release dated July 25, 1994.
</TABLE>
<PAGE> 1
OFFER TO PURCHASE FOR CASH
BY
[LOGO]
3,500,000 SHARES OF ITS COMMON STOCK
AT
$325 NET PER SHARE
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THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, AUGUST 22, 1994, UNLESS THE OFFER IS EXTENDED.
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------------------------
CBS Inc., a New York corporation (the "Company"), is offering to purchase
3,500,000 shares of its Common Stock, par value $2.50 per share (the "Shares"),
at $325 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer").
------------------------
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
------------------------
The Shares are listed and principally traded on the New York Stock Exchange
(the "NYSE"). On June 29, 1994, the last trading day before the Company
announced it was in discussions with QVC, Inc. ("QVC") concerning a possible
business combination with QVC, the closing sales price of the Shares as reported
on the NYSE Composite Tape was $263 per Share. See "Recent Developments -- QVC;
Announcement of the Offer and Stock Split". On July 12, 1994, the last trading
day before the Company announced its intention to commence the Offer, the
closing sales price of the Shares as reported on the NYSE Composite Tape was
$300 per Share. On July 22, 1994, the last trading day before the Company
commenced the Offer, the closing sales price of the Shares as reported on the
NYSE Composite Tape was 309 1/4 per Share. SHAREHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE SHARES.
------------------------
Shares tendered and purchased by the Company will not receive or otherwise
be entitled to the regular quarterly cash dividend of $.50 per share, with a
record date of August 24, 1994, scheduled to be paid by the Company for the
third quarter of 1994. Those Shares tendered and not purchased as a result of
proration or otherwise will remain entitled to payment of such regular quarterly
dividend. See Section 7.
------------------------
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY SHAREHOLDER SHOULD TENDER ANY OR ALL OF SUCH SHAREHOLDER'S SHARES
PURSUANT TO THE OFFER. EACH SHAREHOLDER MUST MAKE ITS OWN DECISION WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. L.T. HOLDING CORP., A
WHOLLY OWNED SUBSIDIARY OF LOEWS CORPORATION, HAS ADVISED THE COMPANY OF ITS
INTENTION TO TENDER NO FEWER THAN 2 MILLION OF THE APPROXIMATELY 3.03 MILLION
SHARES OWNED BY IT, AND THAT IT MAY TENDER ALL OF THE SHARES OWNED BY IT.
------------------------
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
July 25, 1994
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IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either (1) complete the Letter of Transmittal or a facsimile copy
thereof in accordance with the instructions in the Letter of Transmittal, mail
or deliver it and any other required documents to First Chicago Trust Company of
New York (the "Depositary"), and either mail or deliver the certificates for
such Shares to the Depositary along with the Letter of Transmittal or follow the
procedure for book-entry transfer set forth in Section 3, or (2) request such
shareholder's broker, dealer, commercial bank, trust company or nominee to
effect the transaction for such shareholder. Shareholders having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such person if they desire to tender their Shares.
Shareholders who wish to tender Shares and whose certificates for such Shares
are not immediately available should tender such Shares by following the
procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to MacKenzie Partners, Inc. (the "Information Agent")
and Salomon Brothers Inc (the "Dealer Manager") at the addresses and telephone
numbers set forth on the back cover of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL.
IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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SECTION PAGE
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Introduction.......................................................................... 1
Background and Purpose of the Offer................................................... 2
Recent Developments................................................................... 2
Employee Investment Fund.............................................................. 5
Dividend Reinvestment Plan............................................................ 6
The Offer............................................................................. 6
1. Number of Shares; Proration; Extension of the Offer............................. 6
2. Tenders by Holders of 25 or Fewer Shares........................................ 7
3. Procedure for Tendering Shares.................................................. 8
Proper Tender of Shares......................................................... 8
Signature Guarantees and Method of Delivery..................................... 8
Federal Income Tax Withholding.................................................. 9
Book-Entry Delivery............................................................. 9
Guaranteed Delivery............................................................. 9
Convertible Securities; Options................................................. 10
Determinations of Validity; Rejection of Shares; Waiver of Defects;
No Obligation to Give Notice of Defects....................................... 10
4. Withdrawal Rights............................................................... 10
5. Acceptance for Payment of Shares and Payment of Purchase Price.................. 11
6. Certain Conditions of the Offer................................................. 12
7. Price Range of the Shares; Dividends............................................ 13
8. Purpose of the Offer; Certain Effects of the Offer.............................. 15
9. Certain Information Concerning the Company...................................... 17
The CBS/Broadcast Group......................................................... 17
Other Activities................................................................ 18
Summary Historical Financial Information........................................ 18
Summary Unaudited Pro Forma Financial Information............................... 21
Additional Information.......................................................... 26
10. Source and Amount of Funds...................................................... 26
11. Transactions and Arrangements Concerning the Shares............................. 27
12. Certain Legal Matters; Regulatory and Foreign Approvals......................... 27
13. Certain Federal Income Tax Consequences......................................... 27
14. Extension of the Tender Period; Termination; Amendments......................... 29
15. Fees and Expenses............................................................... 30
16. Miscellaneous................................................................... 31
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i
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To the Holders of Common Stock of CBS Inc.:
INTRODUCTION
CBS Inc., a New York corporation (the "Company" or "CBS"), is offering to
purchase 3,500,000 shares of its Common Stock, par value $2.50 per share (the
"Shares"), at a price of $325 per Share (the "Purchase Price"), net to the
seller in cash, upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer").
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY SHAREHOLDER SHOULD TENDER ANY OR ALL OF SUCH SHAREHOLDER'S SHARES
PURSUANT TO THE OFFER. EACH SHAREHOLDER MUST MAKE ITS OWN DECISION WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. L.T. HOLDING CORP., A
WHOLLY OWNED SUBSIDIARY OF LOEWS CORPORATION ("HOLDING"), HAS ADVISED THE
COMPANY OF ITS INTENTION TO TENDER NO FEWER THAN 2 MILLION OF THE APPROXIMATELY
3.03 MILLION SHARES OWNED BY IT, AND THAT IT MAY TENDER ALL OF THE SHARES IT
OWNS. SEE SECTION 8.
Holding has further advised the Company that its determination of the
number of Shares it will tender will be based upon Holding's intention to
achieve certain tax treatment of the Offer. If Holding tenders less than all of
its Shares, Holding's ownership interest in the Company may increase by a small
percentage.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING
THE CONDITION THAT HOLDING TENDER, AND NOT WITHDRAW, AT LEAST 1 MILLION OF ITS
SHARES. THE COMPANY DOES NOT INTEND TO WAIVE THIS CONDITION. SEE SECTION 6.
As of July 22, 1994, the Company had issued and outstanding approximately
15.6 million Shares. In addition, as of such date, approximately 816,000 Shares
were reserved for issuance upon conversion of the Company's $10 Convertible
Series B Preference Stock (the "Convertible Securities"), and approximately
414,000 Shares were reserved for issuance pursuant to the exercise of employee
stock options (the "Options"). The 3,500,000 Shares that the Company is offering
to purchase represent approximately 22% of the Shares outstanding as of July 22,
1994. The Company is not offering to purchase any of the Convertible Securities
or the Options. Holders of Convertible Securities or Options who wish to
participate in the Offer must first convert such Convertible Securities or
exercise such Options, in either case in accordance with the terms and
provisions thereof. To the extent the Convertible Securities are converted into
Shares, but the resulting Shares are not purchased pursuant to the Offer
(whether because the Offer is terminated or withdrawn, or by reason of proration
or otherwise), holders of Convertible Securities so converted will have lost all
preferential rights as holders of Convertible Securities as compared to Shares
and all rights to dividends in respect of the Convertible Securities, including,
without limitation, the next scheduled dividend thereon (which has a record date
of September 15, 1994). NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY HOLDER OF THE CONVERTIBLE SECURITIES OR OPTIONS AS TO
WHETHER TO CONVERT ANY OR ALL SUCH CONVERTIBLE SECURITIES OR EXERCISE ANY OR ALL
SUCH OPTIONS, AS THE CASE MAY BE, OR AS TO WHETHER TO TENDER ANY OR ALL SHARES
ISSUABLE UPON SUCH CONVERSION OR EXERCISE.
If, before the Expiration Date (as defined in Section 1), more than
3,500,000 Shares are properly tendered and not withdrawn, the Company will buy
Shares first from all shareholders who beneficially owned on July 8, 1994, and
continue to beneficially own until the Expiration Date, an aggregate of 25 or
fewer Shares (excluding Shares held in the Company's Employee Investment Fund)
(each an "Odd Lot Owner") and who properly tender all their Shares, and then on
a pro rata basis from all other shareholders who properly tender Shares. See
Section 1. The Company will
<PAGE> 5
return all Shares not purchased under the Offer, including Shares not purchased
because of proration. Tendering shareholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to the Instructions to the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Company. The Company will pay all charges and expenses of the Depositary,
Information Agent and Dealer Manager incurred in connection with the Offer.
The Shares are listed and principally traded on the New York Stock Exchange
(the "NYSE"), and are also listed and traded on the Pacific Stock Exchange. On
June 29, 1994, the last trading day before the Company announced it was in
discussions with QVC, Inc. ("QVC") concerning a possible business combination
with QVC, the closing sales price of the Shares as reported on the NYSE
Composite Tape was $263 per Share. See "Recent Developments -- QVC; Announcement
of the Offer and Stock Split". On July 12, 1994, the last trading day before the
Company announced its intention to commence the Offer, the closing sales price
of the Shares as reported on the NYSE Composite Tape was $300 per Share. On July
22, 1994, the last trading day before the Company commenced the Offer, the
closing sales price of the Shares as reported on the NYSE Composite Tape was
$309 1/4 per Share. See Section 7. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT
MARKET QUOTATION FOR THE SHARES.
BACKGROUND AND PURPOSE OF THE OFFER
In a series of transactions from late 1986 to early 1988, the Company
divested its recorded music and book and magazine publishing operations for an
aggregate of approximately $3.375 billion. In early 1991, the Company completed
a tender offer for 10,526,000 Shares at $190 net per Share for total
consideration (including related fees and expenses) of approximately $2 billion.
The remaining proceeds from these asset dispositions and positive cash flows
from other sources have enabled the Company in recent years to accumulate a
substantial amount of cash and marketable securities while allowing it to make
major investments in program rights, broadcasting assets and television and
radio stations. In addition, the Company has continued, from time to time, to
consider the potential uses of its substantial cash and marketable securities
position, including whether to make major acquisitions, to repurchase Shares or
to make certain special distributions to its shareholders. Most recently, on
July 14, 1994, CBS and Westinghouse Broadcasting Company Inc. (Group W) ("Group
W") announced an agreement which, among other things, provides for long-term
station affiliations between CBS and all Group W television stations and also
proposes to create new, jointly-held entities that will expand the distribution
and programming capabilities of both companies. See "Recent
Developments -- Group W Announcement". The Company also previously announced on
June 30, 1994, that it was in discussions with QVC concerning a possible
business combination in which QVC would merge into CBS, which would be the
surviving corporation. On July 13, 1994, the Company announced that it would not
pursue its acquisition of QVC in light of the offer for QVC made by Comcast
Corporation ("Comcast"). See "Recent Developments -- QVC; Announcement of the
Offer and Stock Split". The Company has determined that the best use for a
substantial portion of the cash and marketable securities position currently is
the repurchase of the 3,500,000 Shares to which the Offer relates. The Offer is
being made to effect such a repurchase. The Offer will afford to shareholders
the opportunity to dispose of Shares without the usual transaction costs
associated with a market sale. See Section 8.
RECENT DEVELOPMENTS
OPERATING RESULTS
For the second quarter of 1994, CBS reported net income of $109.3 million,
or a second-quarter record of $6.84 per share, compared with quarterly results a
year earlier of $107.4 million, or $6.73 per share. The Company's increase in
operating income was led by gains at the CBS Television
2
<PAGE> 6
Network. Last year, the Company's second-quarter earnings of $6.73 per share
included two special items that together lifted earnings by a total of $0.96 per
share, as a result of an insurance settlement and a gain on the sale of certain
marketable securities. Absent the impact of these two special items, earnings
rose 19% from $5.77 per share for the second quarter of 1993 to $6.84 per share
for the second quarter of 1994.
In the second quarter of 1994, the consolidated net sales of CBS were
$882.6 million, an increase of 6% over the prior-year period. Operating income
before interest and taxes was $174.3 million, compared with $153.2 million
earned a year earlier.
The CBS Television Network reported substantially higher operating income
for the second quarter of 1994. In primetime, daytime, late-night and news
programming, scatter pricing remained strong during the second quarter of 1994.
Sales increases were greatest in the late-night and the college basketball
programming segments. The Network's increase in operating income was led by a
marked improvement in its late-night television revenues.
For the CBS Television Stations Division, net sales rose at each of the
seven owned stations, with double-digit growth achieved in New York,
Philadelphia, Miami and Green Bay. During the second quarter of 1993, the
Company recorded a pretax gain of $10.7 million related to insurance settlements
for hurricane damage to its television station in Miami. Absent the impact of
these insurance proceeds, operating income for the Television Stations Division
rose significantly. For the CBS Radio Division, sales and profits rose, led by
improved results at the CBS Radio Networks and the CBS FM Station Group.
Net interest income for the second quarter of 1994 was $8.1 million,
compared with $22.8 million recorded in last year's second quarter. A year ago,
during the second quarter, the Company registered a pretax gain of $14.2 million
on the sale of certain marketable securities, which was reflected in net
interest income. For the second quarter of 1994, the Company recorded no
material gain stemming from the sale of marketable securities. At quarter-end
June 1994, the Company's cash and marketable securities totaled approximately
$1.3 billion, while total debt was approximately $0.6 billion.
GROUP W ANNOUNCEMENT
On July 14, 1994, CBS and Group W announced an agreement by which the
companies would join in a comprehensive strategic partnership establishing
long-term station affiliations between the CBS Television Network and all the
Group W television stations and creating new, jointly-held entities that will
expand the distribution and programming capabilities of both companies
nationwide.
Under the agreement announced, Group W would sign 10-year affiliation
agreements with CBS for each of its major-market VHF television stations, which
include: KPIX-TV San Francisco (no. 5 ranked market) and KDKA-TV Pittsburgh (no.
17 ranked market), both already CBS affiliates; WBZ-TV Boston (no. 6 ranked
market) and KYW-TV Philadelphia (no. 4 ranked market), both NBC affiliates; and
WJZ-TV Baltimore (no. 22 ranked market), an ABC affiliate.
At the same time, the two companies announced their intention to form a
joint venture to acquire additional major-market television stations over the
next several years. Group W would own a majority voting interest in the venture
of 51% and would exercise full operational control of stations owned by the
joint venture. It is currently intended that WCAU-TV, the CBS-owned station in
Philadelphia, will be divested, and the proceeds of that sale or trade will be
contributed by CBS to the joint venture.
The two companies announced their intention to create an equal partnership
to produce and distribute programming to television stations owned by Group W,
CBS and the joint venture and to other stations. This partnership would become
effective upon termination of existing Financial
3
<PAGE> 7
Interest and Syndication rules promulgated by the Federal Communications
Commission, which is expected to occur in November 1995.
Group W and CBS further announced their intention to merge their television
advertising spot sales representation operations. The resulting entity would be
responsible for the sale of spot time on both the Group W and CBS television
stations, as well as the joint venture stations and certain other broadcast
stations. Group W would own a majority voting interest of 51% in the new firm
and would exercise full operational control of the venture.
All of the foregoing is subject to the negotiation and execution of
definitive documentation.
Group W and CBS are also in ongoing discussions regarding other potential
areas of cooperation.
Group W is a wholly owned subsidiary of Westinghouse Electric Corporation,
with interests in television and radio, program production and distribution,
syndication and cable.
CERTAIN AFFILIATES
On May 23, 1994, the Fox Network ("Fox") announced a transaction with New
World Communications Group, under the terms of which potentially up to 12
affiliates of the CBS Television Network, ABC Television Network and NBC
Television Network will change their network affiliations to Fox. Eight of such
affiliates are affiliates of CBS. CBS has pursued replacement affiliates in the
eight markets and to date has found replacements in Tampa, Florida, Phoenix,
Arizona and Cleveland, Ohio. Although CBS remains highly confident of its
ability to replace all of these affiliates, it is possible that CBS will
ultimately be unable to do so in one or more of the five remaining markets in
which it has lost affiliates to Fox. Furthermore, there can be no assurance that
the loss of such affiliates will not have an adverse impact on CBS or that other
affiliates will not change affiliations in the future or that new affiliates
will prove to be adequate replacements for affiliates lost to Fox. Recently, CBS
has also separately entered into agreements with new affiliates in Flint,
Michigan and Yuma, Arizona.
QVC; ANNOUNCEMENT OF THE OFFER AND STOCK SPLIT
On June 30, 1994, the Company announced that it was in discussions with QVC
concerning a possible business combination in which QVC would merge into CBS,
which would be the surviving corporation. In the possible business combination,
among other things, each Share would have been converted into the right to
receive $175.00 in cash and retain .4009 of a Share, with CBS shareholders
ultimately owning approximately 53% of the surviving corporation. On July 13,
1994, the Company announced that it would not pursue its acquisition of QVC in
light of the offer for QVC made by Comcast. CBS further announced that on such
date it would commence the Offer and that following the Offer it intended to
effect a 5-for-1 share split by paying a stock dividend of four new Shares on
each outstanding Share. The Company further announced its intention to continue
its regular cash dividend of $2.00 per Share annually (or $.40 per Share
annually after giving effect to the stock dividend). See Section 7.
CBS-QVC SHAREHOLDER SUITS
Following announcement of discussions regarding a possible merger with QVC,
seven shareholder suits were filed against the Company, three in the Supreme
Court of the State of New York, three in the Chancery Court in Delaware and one
in the Federal Court for the Southern District of New York.
In the Supreme Court of the State of New York, three complaints have been
filed purportedly on behalf of all Company common shareholders excluding the
defendants. The defendants in each New York state case are the Company, Mr.
Laurence Tisch, QVC and Mr. Barry Diller. All three complaints allege that the
Company and Mr. Laurence Tisch breached their fiduciary duty to
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Company shareholders. The plaintiffs seek to enjoin the merger and to recover
money damages. The Company has not yet answered the complaints and believes that
they have now become moot.
In Delaware Chancery Court, three complaints were filed purportedly on
behalf of all QVC stockholders naming QVC, its board, the Company and Mr.
Laurence Tisch as defendants, charging breach of fiduciary duty and aiding and
abetting. An amended complaint has been filed consolidating all three cases but
dropping the Company and Mr. Laurence Tisch as defendants.
The Federal complaint purports to be a class action on behalf of all
persons who purchased Company put options or who sold Company common stock
between June 2, 1994 and June 29, 1994, alleging violations of various Federal
securities laws. Plaintiff alleges that the Company and Mr. Laurence Tisch made
public statements suggesting or implying that a transaction such as the QVC
transaction would not take place, thus depressing the value of the Company
common stock at the time when talks with Mr. Barry Diller were under way.
Plaintiff seeks money damages. The Company has not yet answered this complaint;
however, it believes that the action is without merit and intends to contest it
vigorously.
FINANCIAL IMPACT OF OFFER
Consummation of the Offer will involve the cash payment by the Company of
more than $1.1 billion so that thereafter the Company will have substantially
reduced cash balances and shareholders' equity. Accordingly, the Company will be
dependent upon the future profitability of its broadcasting operations to
generate funds for dividends and other corporate purposes. In addition, the
Company may engage in debt or equity financing. As of June 30, 1994, on a pro
forma basis for the Offer, the Company under its most stringent financial
covenant ratio would have been permitted to incur additional debt of more than
$200 million, in addition to having cash and cash equivalents of more than $100
million; this financial covenant expires on August 1, 1995 upon the redemption
of any remaining Convertible Securities (convertible at a price equal to
approximately $145 per Share). After the Offer, the Company believes that it
retains sufficient financial flexibility to invest in television programming, as
well as in strategic acquisitions and joint ventures in the media arena.
RATINGS WATCH
Various ratings agencies have placed the Company's ratings in respect of
its senior debt securities on "watch", with the potential for downgrade in such
ratings due to the Offer.
ACCOUNTING IMPACT
Under applicable accounting rules, an issuer cannot account for an
acquisition as a "pooling of interests" if the issuer or the acquired business
repurchased its own shares, respectively, during the prior two years.
Accordingly, consummation of the Offer may prevent "pooling of interests"
treatment were certain transactions involving the Company to occur within the
following two years.
EMPLOYEE INVESTMENT FUND
Participants in the Company's Employee Investment Fund and the CBS News
Special Projects Inc. Employee Investment Fund (collectively, the "Plan") who
wish to have the trustee of the Plan tender their interests in Shares held under
the Plan should so indicate by completing, executing and returning to the
trustee the instruction form included in the notice sent to such participants.
Participants in the Plan may not use the Letter of Transmittal to direct the
trustee of the Plan to tender their interests in Shares held under the Plan, but
must use the separate instruction form sent to them. Under the Employee
Retirement Income Security Act of 1974 ("ERISA"), the trustee may be obligated
to take action and make an independent decision irrespective of direction given
by participants. Accordingly, although instructions from participants are being
solicited for the trustee's information and will be given due consideration by
it, the trustee is not bound under ERISA by such
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instructions and accordingly may tender Shares or may not tender Shares, as the
case may be, contrary to such designations. Of course, direction as to the
subsequent reinvestment of the proceeds from the tendered Shares will be
followed by the trustee.
PARTICIPANTS IN THE PLAN SHOULD FORWARD INSTRUCTIONS TO THE TRUSTEE AS
PROMPTLY AS POSSIBLE (AND IN ANY EVENT SUCH INSTRUCTIONS MUST BE RECEIVED BY THE
TRUSTEE BY 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 18, 1994). AS NOTED HEREIN,
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 8:00 P.M., NEW YORK
CITY TIME, ON MONDAY, AUGUST 22, 1994, UNLESS THE OFFER IS EXTENDED.
PARTICIPANTS IN THE PLAN ARE URGED TO READ THE SEPARATE INSTRUCTION FORM
AND RELATED MATERIALS CAREFULLY.
DIVIDEND REINVESTMENT PLAN
Participants in the Company's Dividend Reinvestment Plan (the "Reinvestment
Plan") who wish to have the agent of the Reinvestment Plan tender their
interests in Shares held under the Reinvestment Plan should so indicate by
completing, executing and returning to the agent the instruction form included
in the notice sent to such participants. Participants in the Reinvestment Plan
may not use the Letter of Transmittal to direct the agent of the Reinvestment
Plan to tender their interests in Shares held under the Reinvestment Plan, but
must use the separate instruction form sent to them.
PARTICIPANTS IN THE REINVESTMENT PLAN ARE URGED TO READ THE SEPARATE
INSTRUCTION FORM AND RELATED MATERIALS CAREFULLY.
THE OFFER
1. NUMBER OF SHARES; PRORATION; EXTENSION OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and thereby purchase) 3,500,000 Shares or such lesser number
of Shares as are properly tendered on or before the Expiration Date (and not
withdrawn in accordance with Section 4) at the Purchase Price. The term
"Expiration Date" means 8:00 p.m., New York City time, on Monday, August 22,
1994, unless and until the Company shall have extended the period of time during
which the Offer is open, in which event the term "Expiration Date" shall refer
to the latest time and date at which the Offer, as so extended by the Company,
shall expire. See Section 14 for a description of the Company's right to extend
the time during which the Offer is open and to delay, terminate or amend the
Offer. See also Section 6. Subject to the purchase of Shares properly tendered
and not withdrawn by Odd Lot Owners as set forth in Section 2, if the Offer is
oversubscribed, Shares tendered before the Expiration Date will be subject to
proration. The proration period also expires on the Expiration Date.
The Company expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such extension to the Depositary and
making a public announcement thereof. See Section 14. There can be no assurance,
however, that the Company will exercise its right to extend the Offer.
If (a) the Company (i) increases or decreases the price to be paid for
Shares, (ii) increases the number of Shares being sought and any such increase
in the number of Shares being sought exceeds 2% of the outstanding Shares, (iii)
decreases the number of Shares being sought, or (iv) waives the condition that
Holding tender, and not withdraw, at least 1 million of its Shares, and (b) the
Offer is scheduled to expire at any time earlier than the tenth business day
from and including the date that notice of such increase, decrease or waiver is
first published, sent or given in
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the manner specified in Section 14, the Offer will be extended until the
expiration of such ten business day period. For purposes of the Offer, "business
day" means any day other than a Saturday, Sunday or Federal holiday and consists
of the time period from 12:01 A.M. through 12:00 Midnight, New York City time.
All Shares purchased pursuant to the Offer will be purchased at the
Purchase Price, net to the seller in cash. The Company expressly reserves the
right, in its sole discretion, to amend the Offer and purchase more than
3,500,000 Shares pursuant to the Offer, but does not currently expect to do so.
All Shares not purchased pursuant to the Offer, including Shares not
purchased because of proration and Shares tendered and withdrawn, will be
returned to the tendering shareholders at the Company's expense as promptly as
practicable (which, in the event of proration, is expected to be up to
approximately 12 NYSE trading days) following the Expiration Date or as promptly
as practicable following withdrawal, as the case may be.
If the number of Shares properly tendered and not withdrawn prior to the
Expiration Date is less than or equal to 3,500,000 Shares (or such greater
number of Shares as the Company may elect to purchase pursuant to the Offer),
the Company, upon the terms and subject to the conditions of the Offer, will
purchase at the Purchase Price all Shares so tendered and not withdrawn.
If the number of Shares properly tendered and not withdrawn prior to the
Expiration Date is greater than 3,500,000 Shares (or such greater number of
Shares as the Company may elect to purchase pursuant to the Offer), the Company,
upon the terms and subject to the conditions of the Offer, will accept Shares
for purchase in the following order of priority:
(a) first, all Shares properly tendered and not withdrawn prior to the
Expiration Date by any Odd Lot Owner (that being a shareholder who
beneficially owned as of July 8, 1994, and continues to beneficially own
until the Expiration Date, an aggregate of 25 or fewer Shares (excluding
Shares held in the Plan)) who:
(1) tenders all Shares beneficially owned by such Odd Lot Owner
(excluding Shares held in the Plan) (partial tenders will not qualify
for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) then, after purchase of all the foregoing Shares, all other Shares
properly tendered and not withdrawn prior to the Expiration Date on a pro
rata basis, if necessary (with adjustments to avoid purchases of fractional
Shares).
In the event that proration of tendered Shares is required, the Company
will determine the final proration factor as promptly as practicable after the
Expiration Date. Although the Company does not expect to be able to announce the
final results of such proration until at least approximately seven NYSE trading
days after the Expiration Date, it will announce preliminary results of
proration by press release as promptly as practicable after the Expiration Date.
Shareholders may obtain such preliminary information from the Information Agent
and Dealer Manager and may be able to obtain such information from their brokers
or financial advisors.
2. TENDERS BY HOLDERS OF 25 OR FEWER SHARES
The Company, upon the terms and subject to the conditions of the Offer,
will accept for purchase, without proration, all Shares properly tendered and
not withdrawn on or before the Expiration Date by or on behalf of Odd Lot
Owners. See Section 1. To avoid possible proration, however, an Odd Lot Owner
must properly tender all Shares that such Odd Lot Owner beneficially owns
(excluding Shares held in the Plan); partial tenders will not qualify for this
preference. This preference is not available to owners of more than 25 Shares,
even if such owners have separate stock certificates for 25 or fewer Shares. Any
Odd Lot Owner wishing to tender all Shares
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beneficially owned by such Odd Lot Owner (excluding Shares held in the Plan)
pursuant to this Offer must complete the box captioned "Odd Lots" on the Letter
of Transmittal and, if applicable, on the Notice of Guaranteed Delivery. See
Section 3.
3. PROCEDURE FOR TENDERING SHARES
PROPER TENDER OF SHARES. For Shares to be properly tendered pursuant to
the Offer:
(a) the certificates for such Shares (or confirmation of receipt of
such Shares pursuant to the procedures for book-entry transfer set forth
below), together with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) with any required signature
guarantees, and any other documents required by the Letter of Transmittal,
must be received before the Expiration Date by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase; or
(b) the tendering shareholder must comply with the guaranteed delivery
procedure set forth below.
A tender of Shares made pursuant to any method of delivery set forth herein
will constitute a binding agreement between the tendering shareholder and the
Company upon the terms and subject to the conditions of the Offer, including the
tendering shareholder's representation that (i) such shareholder has a net long
position in the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and (ii) the tender of such Shares complies with Rule 14e-4.
It is a violation of Section 14(e) of the Exchange Act and Rule 14e-4
promulgated thereunder, for a person to tender Shares for such person's own
account unless the person so tendering at the time of tender and as of the
Expiration Date has a net long position at least equal to the number of Shares
tendered and:
(a) owns the number of Shares tendered; or
(b) owns other securities convertible into or exchangeable for such
Shares or owns an option, warrant or right to purchase such Shares and will
acquire Shares for tender by conversion, exchange or exercise of such
option, warrant or right.
Section 14(e) and Rule 14e-4 provide a similar restriction applicable to
the tender or guarantee of a tender on behalf of another person.
SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is
required on the Letter of Transmittal if the Letter of Transmittal is signed by
the registered owner of the Shares (which term, for purposes of this Section,
includes any participant in The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust Company (collectively, the
"Book-Entry Transfer Facilities") whose name appears on a security position
listing as the owner of the Shares) tendered therewith, and payment and delivery
are to be made directly to such registered owner at such owner's address shown
on the records of the Company, or if Shares are tendered for the account of a
bank, broker, dealer, credit union, savings association or other entity that is
a member in good standing of a recognized Medallion Program approved by The
Securities Transfer Association Inc. (each such entity being hereinafter
referred to as an "Eligible Institution"). In all other cases, all signatures on
the Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 1 of the Letter of Transmittal. If a certificate representing Shares
is registered in the name of a person other than the signer of a Letter of
Transmittal, or if payment is to be made, or Shares not purchased or tendered
are to be issued, to a person other than the registered owner, the certificate
must be endorsed or accompanied by an appropriate stock power, in either case
signed exactly as the name of the registered owner appears on the certificate,
with the signature on the certificate or stock power guaranteed by an Eligible
Institution. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of a book-
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entry transfer of such Shares into the Depositary's account at one of the
Book-Entry Transfer Facilities), a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) and any other documents required by the
Letter of Transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING STOCK
CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT
THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
FEDERAL INCOME TAX WITHHOLDING. Unless an exemption applies under the
applicable law and regulations concerning "backup withholding" of Federal income
tax, the Depositary will be required to withhold, and will withhold, 31% of the
gross proceeds otherwise payable to a shareholder or other payee pursuant to the
Offer unless the shareholder or other payee provides such person's tax
identification number (social security number or employer identification number)
and certifies that such number is correct. Each tendering shareholder, other
than a noncorporate foreign shareholder, should complete and sign the main
signature form and the Substitute Form W-9 included as part of the Letter of
Transmittal, so as to provide the information and certification necessary to
avoid backup withholding, unless an applicable exemption exists and is proved in
a manner satisfactory to the Company and the Depositary. Noncorporate foreign
shareholders should generally complete and sign a Form W-8, Certificate of
Foreign Status, a copy of which may be obtained from the Depositary, in order to
avoid backup withholding. In the case of any foreign shareholder, the Depositary
will withhold 30% of the purchase price of Shares purchased from such
shareholder in order to satisfy certain withholding requirements, unless such
foreign shareholder proves in a manner satisfactory to the Company and the
Depositary that either (i) the sale of its Shares pursuant to the Offer will
qualify as a sale or exchange, rather than a dividend, for Federal income tax
purposes (see Section 13), in which case no withholding will be required, or
(ii) the foreign shareholder is eligible for a reduced tax treaty rate with
respect to dividend income, in which case the Depositary will withhold at the
reduced treaty rate.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the Shares at each of the Book-Entry Transfer Facilities for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry delivery of the Shares by causing such facility to
transfer such Shares into the Depositary's account in accordance with such
facility's procedure for such transfer. Even though delivery of Shares may be
effected through book-entry transfer into the Depositary's account at one of the
Book-Entry Transfer Facilities, a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees and
other required documents, must, in any case, be transmitted to and received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the guaranteed delivery procedure
set forth below must be followed. DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY
OTHER REQUIRED DOCUMENTS TO ONE OF THE BOOK-ENTRY TRANSFER FACILITIES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates are not immediately available (or
the procedures for book-entry transfer cannot be completed on a timely basis) or
time will not permit all required documents to reach the Depositary before the
Expiration Date, such Shares may nevertheless be tendered provided that all of
the following conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail or facsimile transmission),
on or prior to the Expiration Date, a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form the Company has
provided with this Offer to Purchase; and
(c) the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
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(or a facsimile thereof) and any other documents required by the Letter of
Transmittal, are received by the Depositary within five NYSE trading days
after the date of execution of such Notice of Guaranteed Delivery.
CONVERTIBLE SECURITIES; OPTIONS. As of July 22, 1994, the Company had
issued and outstanding approximately 1.2 million shares of Convertible
Securities. Each share of the Convertible Securities is (a) entitled to a
dividend of $10 per annum, payable quarterly, (b) convertible into .6915 of a
Share (with no allowance for unpaid dividends) and (c) required to be redeemed
by the Company on August 1, 1995, and, upon liquidation of the Company, is
entitled to $100 (plus accrued and unpaid dividends). As of July 22, 1994, there
were approximately 816,000 Shares reserved for issuance upon conversion of the
Convertible Securities and approximately 414,000 Shares reserved for issuance
pursuant to exercise of the Options.
The Company is not offering to purchase any of the Convertible Securities
or the Options. Holders of Convertible Securities or Options who wish to
participate in the Offer must first convert such Convertible Securities or
exercise such Options, in either case in accordance with the terms and
provisions thereof. To the extent the Convertible Securities are converted into
Shares, but the resulting Shares are not purchased pursuant to the Offer
(whether because the Offer is terminated or withdrawn, or by reason of proration
or otherwise), holders of Convertible Securities so converted will have lost all
preferential rights as holders of Convertible Securities as compared to Shares
and all rights to dividends in respect of the Convertible Securities, including,
without limitation, the next scheduled dividend thereon (which has a record date
of September 15, 1994). NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY HOLDER OF THE CONVERTIBLE SECURITIES OR OPTIONS AS TO
WHETHER TO CONVERT ANY OR ALL SUCH CONVERTIBLE SECURITIES OR EXERCISE ANY OR ALL
SUCH OPTIONS, AS THE CASE MAY BE, OR AS TO WHETHER TO TENDER ANY OR ALL SHARES
ISSUABLE UPON SUCH CONVERSION OR EXERCISE.
DETERMINATIONS OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of Shares
to be accepted and the validity, form, eligibility (including time of receipt)
and acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, which determination shall be final and binding
on all parties. The Company reserves the absolute right to reject any or all
tenders it determines not to be in proper form or the acceptance for payment of
which may, in the opinion of the Company's counsel, be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Offer and
any defect or irregularity in the tender of any particular Shares. No tender of
Shares will be deemed to be properly made until all defects or irregularities
have been cured or waived. None of the Company, the Depositary, the Information
Agent, the Dealer Manager or any other person is or will be obligated to give
notice of any defects or irregularities in tenders, and none of them will incur
any liability for failure to give any such notice.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, a tender of Shares pursuant
to the Offer is irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date and, unless theretofore
accepted for payment by the Company, may also be withdrawn after 12:00 Midnight,
New York City time, on September 20, 1994.
For a withdrawal to be effective, the Depositary must timely receive (at
one of its addresses set forth on the back cover of this Offer to Purchase) a
written, telegraphic or facsimile transmission notice of withdrawal. Such notice
of withdrawal must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered owner, if different from that of the person who tendered such Shares.
If the certificates have been delivered or otherwise identified to the
Depositary, then, prior to the release of such certificates, the tendering
shareholder must also submit the serial numbers shown on the particular
certificates evidencing the Shares and the signature on the notice of withdrawal
must be guaranteed
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by an Eligible Institution (except in the case of Shares tendered by an Eligible
Institution). If Shares have been delivered pursuant to the procedure for
book-entry transfer set forth in Section 3, the notice of withdrawal must
specify the name and the number of the account at the applicable Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with the procedures of such facility.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Company, in its sole discretion,
which determination shall be final and binding on all parties. None of the
Company, the Depositary, the Information Agent, the Dealer Manager or any other
person is or will be obligated to give any notice of any defects or
irregularities in any notice of withdrawal, and none of them will incur any
liability for failure to give any such notice. A withdrawal of a tender of
Shares may not be rescinded, and Shares properly withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. Withdrawn Shares may,
however, be retendered before the Expiration Date by again following any of the
procedures described in Section 3.
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer, promptly after
the Expiration Date, the Company will purchase and pay the Purchase Price for
3,500,000 Shares (subject to increase or decrease as provided in Section 1 and
Section 14) or such lesser number of Shares as are properly tendered and not
withdrawn as permitted in Section 4. For purposes of the Offer, the Company will
be deemed to have accepted for payment (and thereby purchased), subject to
proration, Shares which are tendered and not withdrawn when, as and if it gives
oral or written notice to the Depositary of its acceptance of such Shares for
payment pursuant to the Offer.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any such proration until at least approximately
seven NYSE trading days after the Expiration Date. Certificates for all Shares
not purchased will be returned (or, in the case of Shares delivered by
book-entry transfer, such Shares will be credited to the account maintained with
one of the Book-Entry Transfer Facilities by the participant therein who so
delivered such Shares) as soon as practicable after the Expiration Date without
expense to the tendering shareholder.
Payment for Shares purchased pursuant to the Offer will be made by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering shareholders.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of certificates for such Shares (or a timely
confirmation by a Book-Entry Transfer Facility of book-entry transfer of such
Shares to the Depositary), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees and
any other required documents. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON
THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE COMPANY, REGARDLESS OF ANY
DELAY IN MAKING SUCH PAYMENT.
The Company will pay any stock transfer taxes with respect to the transfer
and sale of Shares to it or its order pursuant to the Offer. If, however,
payment of the Purchase Price is to be made to, or if certificates for Shares
not tendered or accepted for purchase are to be registered in the name of, any
person other than the registered holder, or if tendered certificates are
registered in the name of any person other than the person(s) signing the Letter
of Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder or such person) payable on account of the transfer to such
person will be deducted from the Purchase Price unless satisfactory evidence of
the payment of such taxes or exemption therefrom is submitted. See Instruction 6
of the Letter of Transmittal.
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ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND
SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE
CASE OF A FOREIGN INDIVIDUAL, FORM W-8 OBTAINABLE FROM THE DEPOSITARY) MAY BE
SUBJECT TO REQUIRED FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS
PAID TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 3.
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, and in addition to (and
not in limitation of) the Company's right to extend or amend the Offer at any
time in its sole discretion, the Company shall not be required to accept for
payment any Shares tendered, and may terminate or amend the Offer, if before
acceptance for payment of any such Shares any of the following shall have
occurred (or shall have been determined by the Company to have occurred):
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, before any court or governmental, regulatory or
administrative authority, agency or tribunal, domestic or foreign, which
(i) challenges the making of the Offer, the acquisition of Shares pursuant
to the Offer or otherwise relates in any manner to the Offer; or (ii) in
the sole judgment of the Company, could materially affect the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the business of the
Company or any of its subsidiaries or materially impair the Offer's
contemplated benefits to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any court or any government or governmental,
regulatory or administrative authority, agency or tribunal, domestic or
foreign, which, in the Company's sole judgment, would or might directly or
indirectly (i) make the acceptance for payment of, or payment for, Shares
illegal or otherwise restrict or prohibit consummation of the Offer; (ii)
delay or restrict the ability of the Company, or render the Company unable,
to accept for payment, or pay for, Shares; (iii) materially impair the
contemplated benefits of the Offer to the Company; or (iv) materially
affect the business, condition (financial or other), income, operations or
prospects of the Company and its subsidiaries, taken as a whole, or
otherwise materially impair in any way the contemplated future conduct of
the business of the Company or any of its subsidiaries;
(c) there shall have occurred after July 22, 1994, (i) any general
suspension of trading in, or limitation on prices for, securities on any
United States national securities exchange or in the over-the-counter
market (excluding any coordinated trading halt triggered solely as a result
of a specified decrease in a market index), (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) the commencement of a war, armed hostilities or other
international or national crisis directly or indirectly involving the
United States, (iv) any limitation (whether or not mandatory) by any
governmental, regulatory or administrative agency or authority on, or any
event which, in the sole judgment of the Company, might affect, the
extension of credit by banks or other lending institutions in the United
States, (v) any significant decrease in the market price of the Shares,
(vi) any change in the general political, market, economic or financial
conditions in the United States or abroad that could, in the sole judgment
of the Company, have a material adverse effect on the Company's business,
operations, prospects or the trading in the Shares, (vii) in the case of
any of the foregoing existing at the time of the commencement of the Offer,
a material acceleration or worsening thereof or (viii) any decline in
either the Dow Jones Industrial Average
12
<PAGE> 16
(3,735.04 at the close of business on July 22, 1994) or the Standard and
Poor's Index of 500 Industrial Companies (453.11 at the close of business
on July 22, 1994) by an amount in excess of 15% measured from the close of
business on July 22, 1994;
(d) after July 22, 1994, any tender or exchange offer with respect to
the Shares (other than the Offer), or any merger, acquisition, business
combination or other similar transaction with or involving the Company or
any subsidiary, shall have been proposed, announced or made by any person
or entity;
(e) after July 22, 1994, any change shall occur or be threatened in
the business, condition (financial or other), income, operations or
prospects of the Company and its subsidiaries, taken as a whole, which, in
the sole judgment of the Company, is or may be material to the Company;
(f) (i) any person, entity or "group" (as that term is used in Section
13(d)(3) of the Exchange Act) shall have acquired, or proposed to acquire,
beneficial ownership of more than 5% of the outstanding Shares (other than
a person, entity or group which had publicly disclosed such ownership in a
Schedule 13D or 13G (or an amendment thereto) on file with the Securities
and Exchange Commission prior to July 22, 1994), (ii) any new group shall
have been formed which beneficially owns more than 5% of the outstanding
Shares or (iii) any person, entity or group shall have filed a Notification
and Report Form under the Hart-Scott-Rodino Antitrust Improvement Act of
1976, or made a public announcement reflecting an intent to acquire the
Company or any of its subsidiaries or any of their respective assets or
securities; or
(g) Holding shall fail to tender (and not withdraw) at least 1 million
of the Shares beneficially owned by it;
and, in the sole judgment of the Company, in any such case and regardless of the
circumstances (including any action or inaction by the Company) giving rise to
such condition, such event makes it inadvisable to proceed with the Offer or
with such acceptance for payment or payment.
THE COMPANY DOES NOT INTEND TO WAIVE THE CONDITION SET FORTH IN PARAGRAPH
(G) ABOVE. IF THE COMPANY WAIVES SUCH CONDITION AND THE OFFER IS SCHEDULED TO
EXPIRE AT ANY TIME EARLIER THAN THE TENTH BUSINESS DAY FROM AND INCLUDING THE
DATE THAT NOTICE OF SUCH WAIVER IS FIRST PUBLISHED, SENT OR GIVEN IN THE MANNER
SPECIFIED IN SECTION 14, THE OFFER WILL BE EXTENDED UNTIL THE EXPIRATION OF SUCH
TEN BUSINESS DAY PERIOD. The foregoing conditions are for the sole benefit of
the Company and may be asserted by the Company regardless of the circumstances
(including any action or inaction by the Company) giving rise to any such
condition, and any such condition may be waived by the Company, in whole or in
part, at any time and from time to time in its sole discretion; provided,
however, that the Exchange Act and the rules and regulations promulgated
thereunder require that all conditions to the Offer, other than those relating
to the receipt of certain necessary governmental approvals, must be satisfied or
waived prior to the Expiration Date. The Company's failure at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts or
circumstances; and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Any determination by the Company
concerning the events described above and any related judgment by the Company
regarding the inadvisability of proceeding with the acceptance for payment or
payment for any tendered Shares will be final and binding on all parties.
7. PRICE RANGE OF THE SHARES; DIVIDENDS
The Shares are listed and principally traded on the NYSE and are also
listed and traded on the Pacific Stock Exchange. The following table sets forth,
for each period shown, the high and low
13
<PAGE> 17
closing prices of the Shares as reported on the NYSE Composite Tape and the
dividends paid per Share:
<TABLE>
<CAPTION>
COMMON STOCK
PRICE RANGE DIVIDENDS
--------------- PAID PER
HIGH LOW SHARE
----- ----- ---------
<S> <C> <C> <C>
1992
1st Quarter................................................. $174 3/4 $136 1/4 $ .25
2nd Quarter................................................. 205 3/4 168 .25
3rd Quarter................................................. 216 1/2 182 3/4 .25
4th Quarter................................................. 214 176 1/2 .25
1993
1st Quarter................................................. 216 3/8 186 1/8 .25
2nd Quarter................................................. 250 1/2 214 .25
3rd Quarter................................................. 277 229 .25
4th Quarter................................................. 324 1/2 269 3/8 .50
1994
1st Quarter................................................. 321 275 1/8 .50
2nd Quarter................................................. 313 254 .50
3rd Quarter (through July 22, 1994)......................... 313 1/2 300 .50*
</TABLE>
- ---------------
* Announced but not yet paid
On June 29, 1994, the last trading day before the Company announced it was
in discussions with QVC concerning a possible business combination with QVC, the
closing sales price of the Shares as reported on the NYSE Composite Tape was
$263 per Share. See "Recent Developments -- QVC; Announcement of the Offer and
Stock Split". On July 12, 1994, the last trading day before the Company
announced its intention to commence the Offer, the closing sales price of the
Shares as reported on the NYSE Composite Tape was $300 per Share. On July 22,
1994, the last trading day before the Company commenced the Offer, the closing
sales price of the Shares as reported on the NYSE Composite Tape was $309 1/4
per Share. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
SHARES.
The Company has paid regular quarterly dividends since the early 1930s. On
July 13, 1994, the Company announced its intention to continue its regular cash
dividend of $2.00 per share annually (or $.40 per share annually after giving
effect to the intended stock dividend of four new Shares on each outstanding
Share). See "Recent Developments -- QVC; Announcement of the Offer and Stock
Split". It is important to note, however, that the dividend policy of the
Company is established by the Board of Directors of the Company from time to
time and there can be no assurance that such recently announced policy will not
change in the future. For a discussion of certain potential impediments to the
payment of dividends by the Company, see "Recent Developments -- Financial
Impact of Offer".
The record date for the regular quarterly cash dividend of $.50 is
currently set for August 24, 1994. Accordingly, Shares tendered and purchased by
the Company will not receive or otherwise be entitled to such regular quarterly
dividend scheduled to be paid by the Company for the third quarter of 1994. If
the Offer is extended beyond August 22, 1994, the Company plans to move the
record date for such regular quarterly dividend to a date subsequent to such
later Expiration Date so Shares tendered and purchased by the Company will not
receive or otherwise be entitled to such dividend. Those Shares tendered and not
purchased as a result of proration or otherwise will remain entitled to payment
of such regular quarterly dividend.
14
<PAGE> 18
8. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
The Company believes that the purchase of its Shares at this time
represents the best use of a substantial portion of the cash and marketable
securities it has available and is an attractive investment opportunity. The
Offer will afford to shareholders the opportunity to dispose of Shares without
the usual transaction costs associated with a market sale. The Offer will also
allow qualifying Odd Lot Owners whose Shares are purchased pursuant to the Offer
to avoid the payment of brokerage commissions and any applicable odd-lot
discount payable on a sale of Shares in a transaction effected on a securities
exchange. Shareholders whose Shares are not purchased in the Offer will obtain
an increase in their ownership interest in the Company and thus in the Company's
future earnings and assets. To the extent the purchase of Shares in the Offer
results in a reduction in the number of shareholders of record, the costs to the
Company for services to shareholders will be reduced. See "Background and
Purpose of the Offer" for a discussion of certain information relating to the
background of the Offer.
Shares the Company acquires pursuant to the Offer will initially be held in
the Company's treasury or retired (or a combination thereof) and will be
available for the Company to issue without further shareholder action (except as
required by applicable law or the rules of the securities exchanges on which the
Shares are listed) for such purposes as, among others, the acquisition of other
businesses, the raising of additional capital for use in the Company's business,
the satisfaction of conversion requirements under securities issued by the
Company, the distribution of stock dividends and the implementation of, or the
satisfaction of obligations under, employee benefit plans. Except as
contemplated by "Recent Developments -- QVC; Announcement of the Offer and Stock
Split" and for the potential, simultaneous with completion of the Offer, for
existing treasury Shares to be cancelled and restored to the status of
authorized but unissued Shares, the Company has no present plans to use any
authorized but unissued or treasury Shares for any other purpose. Furthermore,
the Company continually considers the acquisition of, among others, television
and radio broadcast stations and, to the extent any such stations become
available on attractive terms, authorized but unissued or, to the extent
available, treasury Shares may be used to make such acquisition.
Although the Company does not have any current plans to acquire additional
Shares, the Company may in the future purchase Shares (in addition to those
purchased pursuant to the Offer) on the open market, in privately negotiated
transactions, through tender offers or otherwise, in such amounts, at such
prices and at such times as the Company may determine. Rule 13e-4 under the
Exchange Act generally prohibits the Company and its affiliates from purchasing
any Shares, other than pursuant to the Offer, until at least ten business days
after the Expiration Date. Neither the Company nor the Plan will purchase any
additional Shares until at least ten business days after the Expiration Date.
Any possible future purchases by the Company will depend on many factors,
including the market price of the Shares, the Company's business and financial
position, alternative investment opportunities available to the Company, the
results of the Offer and general economic and market conditions. Any of these
possible purchases may be on the same terms as, or on terms more or less
favorable than, those of the Offer.
As of July 22, 1994, the Company had issued and outstanding approximately
15.6 million Shares. The 3,500,000 Shares that the Company is offering to
purchase pursuant to the Offer represent approximately 22% of the Shares
outstanding as of such date.
THE COMPANY HAS BEEN ADVISED THAT HOLDING, WHICH OWNS APPROXIMATELY 3.03
MILLION SHARES, INTENDS TO TENDER NO FEWER THAN 2 MILLION OF THE APPROXIMATELY
3.03 MILLION SHARES OWNED BY IT, AND THAT IT MAY TENDER ALL OF THE SHARES OWNED
BY IT. HOWEVER, HOLDING IS NOT OBLIGATED TO TENDER ITS SHARES PURSUANT TO THE
OFFER.
Holding has further advised the Company that its determination of the
number of Shares it will tender will be based upon Holding's intention to
achieve certain tax treatment of the Offer. If Holding
15
<PAGE> 19
tenders less than all of its Shares, Holding's ownership interest in the Company
may increase by a small percentage.
The Company has been further advised that some, but not all, of its
executive officers and directors, which as a group beneficially own less than 1%
of the outstanding Shares, intend to tender all their Shares pursuant to the
Offer. However, the executive officers and directors of the Company are not
obligated to tender their respective Shares pursuant to the Offer. This
percentage is not inclusive of Shares beneficially owned by Holding. Beneficial
ownership of such Shares has been disclaimed by Laurence A. Tisch, Chairman of
the Board, and Co-chief Executive Officer of Loews Corporation, and his brother,
Preston R. Tisch, a director, the President and Co-chief Executive Officer of
Loews Corporation, each of whom is a director (and, in the case of Laurence A.
Tisch, an executive officer) of the Company.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING
THAT HOLDING TENDER, AND NOT WITHDRAW, AT LEAST 1 MILLION OF ITS SHARES. THE
COMPANY DOES NOT INTEND TO WAIVE THIS CONDITION. SEE SECTION 6.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce the
number of shareholders. Nonetheless, there will still be a sufficient number of
Shares outstanding and publicly traded following the consummation of the Offer
to ensure a continued trading market in the Shares. Based on the published
guidelines of the NYSE and the Pacific Stock Exchange, the purchase by the
Company of Shares pursuant to the Offer will not cause its remaining Shares to
be delisted from either of such exchanges.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. Following the repurchase of
Shares pursuant to the Offer, the Shares will continue to be "margin securities"
for purposes of the Federal Reserve Board's margin regulations.
The Shares are registered under the Exchange Act which requires, among
other things, that the Company furnish certain information to its shareholders
and to the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's shareholders. The purchase by the Company of
Shares pursuant to the Offer will not result in the Shares becoming eligible for
deregistration under the Exchange Act.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY SHAREHOLDER SHOULD TENDER ANY OR ALL OF SUCH SHAREHOLDER'S SHARES
PURSUANT TO THE OFFER. EACH SHAREHOLDER MUST MAKE SUCH SHAREHOLDER'S OWN
DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
16
<PAGE> 20
9. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a New York corporation and was organized in 1927. The
principal executive offices of the Company are located in its headquarters
building at 51 West 52 Street, New York, New York 10019. The operations of the
Company are carried out primarily by the CBS/Broadcast Group.
THE CBS/BROADCAST GROUP
The CBS/Broadcast Group is made up of seven operating divisions, all
supported by the CBS Operations and Administration Division. CBS employs
approximately 6,500 full-time employees in locations worldwide. The seven
operating divisions are:
- CBS Television Network (including CBS Sales,
CBS Marketing and Communications, and CBS Affiliate Relations)
- CBS Entertainment
- CBS News
- CBS Sports
- CBS Television Stations
- CBS Radio
- CBS Enterprises
For a discussion of certain developments in respect of the CBS/Broadcast Group,
see "Recent Developments -- Group W Announcement" and "Recent
Developments -- Certain Affiliates".
The CBS Television Network Division makes available a comprehensive
schedule of entertainment, news and sports programs to its affiliated and
Company-owned television stations, which together reach nearly every U.S.
television household. In general, the Company pays the cost of producing or
acquiring the broadcast rights for its programming and pays compensation to its
affiliated stations for broadcasting its programming. The CBS Television
Network's net sales are in large part derived from the sale to advertisers of
time in network programs for commercial announcements. The CBS Television
Network Division includes CBS Sales, CBS Marketing and Communications and CBS
Affiliate Relations. CBS Sales is responsible for the marketing and sale of
Television Network advertising time to national advertisers, as well as the
development of marketing strategies for specific product lines. CBS Marketing
and Communications is engaged in the creation of advertising and promotional
campaigns for the CBS Television Network and its affiliated stations, as well as
the development and execution of advertiser-driven promotions, and is also
responsible for the Company's media relations. CBS Affiliate Relations is
responsible for the full range of ongoing activities and mutual concerns between
the CBS Television Network and more than 200 independently-owned affiliated
stations. The CBS Television Network's programming is provided by three
divisions: CBS Entertainment, CBS News and CBS Sports.
The CBS Entertainment Division is responsible for developing, producing
and/or acquiring rights to and scheduling entertainment programming -- primetime
series, motion pictures-for-television, mini-series, specials, children's
programs, daytime serials and game shows and late night programming -- broadcast
primarily on the CBS Television Network. CBS Entertainment Productions is the
division's internal production unit that develops and supplies programming
primarily for broadcast and cable television.
The CBS News Division operates a worldwide news organization, serving the
CBS Television and Radio Networks with regularly scheduled news and public
affairs broadcasts and special reports. The division maintains news bureaus in
the United States and abroad in addition to its headquarters in New York. CBS
News Productions is a unit within the division that produces and sells news
programming to broadcast, cable and home video markets, as well as other media
markets.
17
<PAGE> 21
The CBS Sports Division broadcasts a portfolio of events on the CBS
Television Network, which currently includes NCAA Basketball, the NCAA Men's and
Women's Basketball Tournament and Championship, the Masters(R), the PGA
Championship, the President's Cup and PGA Tour Golf, the Daytona 500, the U.S.
Open Tennis Championships, figure skating, certain college football bowl games
and CBS "Eye on Sports", among other events.
The CBS Television Stations Division operates and serves as sales
representative for the seven Company-owned television stations (serving New
York, Chicago, Los Angeles, Philadelphia, Minneapolis-St. Paul (which includes
two satellite stations), Green Bay-Appleton (which includes a satellite station)
and Miami). This division also operates Midwest Sports Channel, a supplier of
regional sports programming to certain cable subscribers in five upper
midwestern states, and Teleport Minnesota, which provides programming and
technical services to cable operators in the upper midwest and operates a
service enabling broadcast companies and other clients to transmit video signals
into and out of Minnesota.
The CBS Radio Division operates the eight Company-owned AM radio stations
(serving New York, Chicago, Detroit, Los Angeles, Philadelphia, Minneapolis-St.
Paul, St. Louis and San Francisco) and 13 Company-owned FM radio stations
(serving the same cities named above, as well as Boston, Dallas/Fort Worth (two
stations), Houston and Washington, D.C.); and serves as broadcast sales
representative for the Company-owned radio stations, 14 independently-owned AM
and 24 independently-owned FM radio stations. In addition, the CBS Radio
Division operates a number of radio networks. The CBS Radio Network, with more
than 400 affiliates (mostly AM), provides news and information programming. CBS
SPECTRUM Radio Network provides brief newscasts and an audio feature package to
stations. CBS Radio Sports provides live coverage of certain major sporting
events. CBS Americas, the CBS Hispanic radio network, provides a news service
and Spanish broadcasts of certain major sporting events to U.S. and Latin
American stations. A syndicated programming unit, CBS Radio Programs, provides
long-form music and talk programming to a variety of stations.
The CBS Enterprises Division, operating primarily through the CBS Broadcast
International and CBS Video units, is responsible for the worldwide distribution
of Company-owned news and public affairs broadcasts, sports and entertainment
programming and feature films to broadcast and other media (including cable,
airlines and home video) and the acquisition of broadcast and non-broadcast
rights in independently produced programs where permitted by law.
OTHER ACTIVITIES
The CBS/FOX Company is a partnership in which CBS and a wholly-owned
subsidiary of Twentieth Century-Fox Film Corporation each owns a 50% interest.
Radford Studio Center Inc., a wholly owned subsidiary of CBS, owns and
operates television and film production facilities at its Studio Center facility
in Studio City, California.
SUMMARY HISTORICAL FINANCIAL INFORMATION
Set forth below is certain summary consolidated historical financial
information for the Company and its subsidiaries. The historical financial
information at and for the years ended December 31, 1993, and December 31, 1992,
has been summarized from the Company's audited consolidated financial statements
incorporated by reference in the Company's Annual Report on Form 10-K for the
year ended December 31, 1993 (the "1993 10-K"). The historical financial
information at and for the three months ended March 31, 1994, and March 31,
1993, has been summarized from the Company's unaudited consolidated financial
statements as set forth in the Company's Quarterly Report on Form 10-Q for the
three months ended March 31, 1994 (the "1994 First Quarter 10-Q"). The following
summary historical financial information should be read in conjunction with, and
is qualified in its entirety by reference to, such audited and unaudited
consolidated financial statements and their related notes. See "Additional
Information" below and,
18
<PAGE> 22
for a discussion of certain recent developments concerning the Company, see
"Recent Developments".
CBS INC.
SUMMARY HISTORICAL FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
--------------------- ---------------------
1993 1992 1994 1993
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash and marketable securities................ $ 594.1 $ 477.7 $ 799.4 $ 674.3
Other current assets.......................... 1,083.4 1,002.8 963.4 1,014.7
-------- -------- -------- --------
Total current assets................ 1,677.5 1,480.5 1,762.8 1,689.0
Marketable securities......................... 826.0 752.6 797.4 731.4
Net property, plant and equipment............. 519.1 485.4 512.1 491.2
Goodwill, net of accumulated amortization..... 280.6 283.8 278.7 281.4
Other assets.................................. 115.5 172.7 128.3 93.9
-------- -------- -------- --------
$3,418.7 $3,175.0 $3,479.3 $3,286.9
======== ======== ======== ========
Current liabilities........................... $1,038.9 $1,117.3 $1,017.6 $1,606.7
Long-term debt................................ 590.3 870.0 590.2 479.2
Other liabilities............................. 406.0 467.8 417.3 431.9
Deferred income taxes......................... 120.8 148.6 127.2 148.2
Preference stock subject to redemption........ 124.7 124.5 117.8 124.6
Shareholders' equity.......................... 1,138.0 446.8 1,209.2 496.3
-------- -------- -------- --------
$3,418.7 $3,175.0 $3,479.3 $3,286.9
======== ======== ======== ========
Book value per common share(1)................ $ 73.50 $ 33.21 $ 77.98 $ 36.84
</TABLE>
- ---------------
(1) Book value per common share is defined as shareholders' equity, divided by
the number of common shares outstanding at the end of the period.
19
<PAGE> 23
CBS INC.
SUMMARY HISTORICAL FINANCIAL INFORMATION
CONDENSED CONSOLIDATED INCOME STATEMENTS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
--------------------- -----------------------
1993 1992 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales................................... $3,510.1 $3,503.0 $1,246.9 $ 878.7
======== ======== ======== ========
Income from continuing operations........... $ 326.2 $ 162.5 $ 69.3 $ 54.2
Cumulative effects of
changes in accounting principles.......... -- (81.5) -- --
-------- -------- -------- --------
Net income.................................. $ 326.2 $ 81.0 $ 69.3 $ 54.2
======== ======== ======== ========
Per common share(1):
Continuing operations..................... $ 20.39 $ 10.51 $ 4.23 $ 3.50
Cumulative effects of
changes in accounting principles....... -- (5.28) -- --
-------- -------- -------- --------
Net income................................ $ 20.39 $ 5.23 $ 4.23 $ 3.50
======== ======== ======== ========
Ratio of earnings to fixed charges(2)....... 8.3 3.5 8.2 5.3
</TABLE>
- ---------------
(1) For the year ended December 31, 1993, the fully diluted earnings per common
share was considered equal to primary earnings per common share because the
addition of potentially dilutive securities which were not common stock
equivalents would have resulted in immaterial dilution. For the year ended
December 31, 1992, and for the three months ended March 31, 1994, and March
31, 1993, the fully diluted earnings per common share calculations produced
an antidilutive effect.
(2) For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations before provisions for
income taxes and fixed charges. Fixed charges consist of interest on debt,
amortization of debt discount and debt issue expenses and the portion of
rentals deemed representative of the interest factor.
20
<PAGE> 24
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
Set forth below is certain unaudited pro forma consolidated financial
information of the Company and its subsidiaries based on historical information
which has been adjusted to reflect the assumed purchase pursuant to the Offer of
3,500,000 Shares at a price of $325 per Share and the anticipated source of
funds therefor. The assumptions on which the pro forma financial information is
based are further described in the Notes to Summary Unaudited Pro Forma
Financial Information (the "Notes"). The pro forma financial information is
based on certain assumptions and estimates and, therefore, does not purport to
be indicative of (a) the results which would actually have been achieved, or the
balance sheet as it actually would have been, if the purchase of Shares pursuant
to the Offer had been completed as of the dates indicated in the Notes or (b)
future results of operations and financial condition. The pro forma financial
information should be read in conjunction with the Notes, which are an integral
part of the pro forma financial information, and the audited and unaudited
financial statements and related notes set forth in the Company's 1993 10-K and
1994 First Quarter 10-Q, as well as the summary historical financial information
set forth above. See "Additional Information" below and, for a discussion of
certain recent developments concerning the Company, see "Recent Developments".
CBS INC.
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1993
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS PRO FORMA
DECEMBER 31, ------------------------ DECEMBER 31,
1993 DEBIT CREDIT 1993
------------ -------- -------- ------------
<S> <C> <C> <C> <C>
Cash and marketable securities... $ 594.1 $ 732.0(3) $1,137.5(4) $ --
186.1(8) 374.7(7)
Other current assets............. 1,083.4 1,083.4
------------ ------------
Total current assets... 1,677.5 1,083.4
Marketable securities............ 826.0 732.0(3) 94.0
Net property, plant and
equipment...................... 519.1 519.1
Goodwill, net of accumulated
amortization................... 280.6 280.6
Other assets..................... 115.5 115.5
------------ -------- -------- ------------
$3,418.7 $ 918.1 $2,244.2 $2,092.6
============= ======== ======== =============
Current liabilities.............. $1,038.9 $ 374.7(7) $ 186.1(8) $ 850.3
Long-term debt................... 590.3 590.3
Other liabilities................ 406.0 406.0
Deferred income taxes............ 120.8 120.8
Preference stock subject to
redemption..................... 124.7 124.7
Shareholders' equity............. 1,138.0 1,137.5(4) .5
------------ -------- -------- ------------
$3,418.7 $1,512.2 $ 186.1 $2,092.6
============= ======== ======== =============
Book value per common share(2)... $ 73.50 $ .03
</TABLE>
See accompanying Notes to Summary Unaudited Pro Forma Financial Information.
21
<PAGE> 25
CBS INC.
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1994
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS PRO FORMA
MARCH 31, ----------------------- MARCH 31,
1994 DEBIT CREDIT 1994
---------- -------- -------- ----------
<S> <C> <C> <C> <C>
Cash and marketable securities......... $ 799.4 $ 709.9(3) $1,137.5(4) $ 17.2
354.6(7)
Other current assets................... 963.4 963.4
---------- ----------
Total current assets......... 1,762.8 980.6
Marketable securities.................. 797.4 709.9(3) 87.5
Net property, plant and equipment...... 512.1 512.1
Goodwill, net of accumulated
amortization......................... 278.7 278.7
Other assets........................... 128.3 128.3
---------- -------- -------- ----------
$3,479.3 $ 709.9 $2,202.0 $1,987.2
=========== ======== ======== ===========
Current liabilities.................... $1,017.6 $ 354.6(7) $ 663.0
Long-term debt......................... 590.2 590.2
Other liabilities...................... 417.3 417.3
Deferred income taxes.................. 127.2 127.2
Preference stock subject to
redemption........................... 117.8 117.8
Shareholders' equity................... 1,209.2 1,137.5(4) 71.7
---------- -------- ----------
$3,479.3 $1,492.1 $1,987.2
=========== ======== ===========
Book value per common share(2)......... $ 77.98 $ 4.62
</TABLE>
See accompanying Notes to Summary Unaudited Pro Forma Financial Information.
22
<PAGE> 26
CBS INC.
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED INCOME STATEMENT
YEAR ENDED DECEMBER 31, 1993
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
<TABLE>
<CAPTION>
PRO FORMA
YEAR ENDED YEAR ENDED
DECEMBER 31, PRO FORMA DECEMBER 31,
1993 ADJUSTMENTS 1993
------------ ----------- ------------
<S> <C> <C> <C>
Net sales.................................. $3,510.1 $3,510.1
============== ==============
Net income................................. $ 326.2 $ (50.8)(5) $ 275.4
============== ============ ==============
Per common share(6):
Net income............................... $ 20.39 $ 1.70 $ 22.09
============== ============ ==============
Ratio of earnings to fixed charges(1)...... 8.3 7.0
</TABLE>
See accompanying Notes to Summary Unaudited Pro Forma Financial Information.
23
<PAGE> 27
CBS INC.
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED INCOME STATEMENT
THREE MONTHS ENDED MARCH 31, 1994
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
<TABLE>
<CAPTION>
THREE MONTHS PRO FORMA
ENDED PRO FORMA THREE MONTHS ENDED
MARCH 31, 1994 ADJUSTMENTS MARCH 31, 1994
----------------- ----------- ------------------
<S> <C> <C> <C>
Net sales......................... $ 1,246.9 $1,246.9
=================== ====================
Net income........................ $ 69.3 $ (12.7)(5) $ 56.6
=================== ============ ====================
Per common share(6):
Net income...................... $ 4.23 $ .18 $ 4.41
=================== ============ ====================
Ratio of earnings to fixed
charges(1)...................... 8.2 6.9
</TABLE>
See accompanying Notes to Summary Unaudited Pro Forma Financial Information.
24
<PAGE> 28
NOTES TO SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
The summary unaudited pro forma financial information is based on the
historical financial statements of the Company. The unaudited pro forma
statements of income assume that the purchase of Shares pursuant to the Offer
had taken place as of January 1, 1994, and as of January 1, 1993, for the
periods ended March 31, 1994, and December 31, 1993, respectively. The unaudited
pro forma balance sheets assume that the purchase of Shares pursuant to the
Offer had taken place as of March 31, 1994, and December 31, 1993, respectively.
The pro forma financial information is based on certain assumptions and
estimates and, therefore, does not purport to be indicative of (a) the results
which actually would have been achieved, or the balance sheet as it actually
would have been, if the purchase of the Shares pursuant to the Offer had been
completed as of such dates or (b) future results of operations and financial
condition.
(1) For the purpose of computing the ratio of earnings to fixed
charges, earnings consist of income from continuing operations before
provisions for income taxes and fixed charges. Fixed charges consist of
interest on debt, amortization of debt discount and debt issue expenses and
the portion of rentals deemed representative of the interest factor.
(2) Book value per common share is defined as shareholders' equity,
divided by the number of common shares outstanding at the end of the
period.
(3) For pro forma purposes, all of the Company's long-term investment
portfolio of marketable securities has been reclassified to current assets
except for $94.0 million and $87.5 million as at December 31, 1993 and
March 31, 1994, respectively, related to marketable securities invested in
a trust fund to implement the Company's agreement with the New York City
Industrial Development Agency. Under this agreement, the Company is
required to invest in production facilities and develop new broadcasting
and production technologies in New York City in return for certain tax
incentives and low-cost energy.
(4) Assumes the purchase pursuant to the Offer of 3,500,000 Shares at
a price of $325 per Share, but does not adjust for transaction costs and
expenses which are not considered significant.
(5) An assumed rate of interest of 7.5% pretax was used to calculate
the reduction in interest income and/or increase in interest expense
attributable to cash outlays from the Company's portfolios and borrowings
related to cash shortfalls.
(6) Earnings Per Common Share Data:
<TABLE>
<CAPTION>
PRO FORMA
-------------------------
THREE MONTHS THREE MONTHS
YEAR ENDED ENDED YEAR ENDED ENDED
DECEMBER 31, MARCH 31, DECEMBER 31, MARCH 31,
1993 1994 1993 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Weighted average shares outstanding... 14,797 15,490 14,797 15,490
Add: Common stock equivalents:
5% Debentures............. 649 649
Other..................... 92 92
Less: Tender offer................... (3,500) (3,500)
------------ ------------ ------------ ------------
Adjusted Weighted Average Shares
Outstanding......................... 15,538 15,490 12,038 11,990
============= ============= ============= =============
</TABLE>
For the year ended December 31, 1993, the fully diluted earnings per common
share was considered equal to primary earnings per common share because the
addition of potentially dilutive securities which were not common stock
equivalents would have resulted in immaterial dilution. For the three
months ended March 31, 1994, the fully diluted earnings per common share
calculation produced an antidilutive effect. For pro forma purposes,
earnings per
25
<PAGE> 29
common share was calculated based on the adjusted weighted average shares
outstanding for the respective periods.
(7) Current liabilities include securities sold under repurchase
agreements of $374.7 million and $354.6 million as of December 31, 1993,
and March 31, 1994, respectively. The investments acquired with these funds
are included in cash and marketable securities as of the respective dates.
It is assumed that the liabilities under these repurchase agreements are
extinguished as the investments related to these liabilities are liquidated
for the purchase of the Shares pursuant to this Offer.
(8) The net negative balance of $186.1 million of cash and marketable
securities as of December 31, 1993, resulting from the adjustments
indicated in notes 3, 4 and 7, is reclassified and reflected in current
liabilities. To finance a portion of the funds required on a pro forma
basis, the Company could have used preferred stock financing to the extent
that financial covenants would have limited its freedom to incur debt for
all amounts needed. On a pro forma basis as of June 30, 1994, such
financial covenants would not have been so limiting. See "Recent
Developments -- Financial Impact of Offer".
------------------------
ADDITIONAL INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). The Company is required to disclose in such proxy
statements certain information, as of particular dates, concerning the Company's
directors and officers, their remuneration, stock options granted to them, the
principal holders of the Company's securities and any material interest of such
persons in transactions with the Company. The Company has also filed an Issuer
Tender Offer Statement on Schedule 13E-4 with the Commission which includes
certain additional information relating to the Offer.
Such material can be inspected and copied at the public reference
facilities of the Commission, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at its regional offices at Seven World Trade Center, 13th Floor,
New York, New York 10048, and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Reports, proxy materials and other
information about the Company are also available at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005, and the Pacific Stock
Exchange, 301 Pine Street, San Francisco, California 94104. Copies may also be
obtained by mail from the Commission's Public Reference Branch, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Company's Schedule 13E-4 will not be
available at the Commission's regional offices.
The Company intends to file its Quarterly Report on Form 10-Q for the six
months ended June 30, 1994, on or about August 5, 1994. Interested CBS
shareholders may obtain a copy of such Report from the CBS Shareholder Relations
Department, 51 West 52 Street, New York, NY 10019 (telephone no. (212)
975-6723). Interested shareholders may also obtain copies of such Report in the
manner described in the immediately preceding paragraph.
10. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 3,500,000 Shares pursuant to the Offer,
the total amount required by the Company to purchase such Shares and pay related
fees and expenses will be approximately $1.14 billion. The Company anticipates
that it will fund the purchase of Shares pursuant to the Offer and the payment
of related fees and expenses from available cash and the sale of marketable
securities. The Company may also supplement working capital with short-term bank
financing.
26
<PAGE> 30
11. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge, any of
the directors or executive officers of the Company or any of its subsidiaries,
nor any associates of any of the foregoing, has effected any transactions in the
Shares during the 40 business days prior to the date hereof except for the
(a) purchase for the Plan on May 18, 1994, of 1,654 Shares at a price per Share
of approximately $303, (b) purchase for the Plan on June 22, 1994, of 2,878
Shares at a price per Share of approximately $260, (c) purchase for the Plan on
July 21, 1994, of 2,273 Shares at a price per Share of approximately $308, (d)
sale by Mr. Jeffrey Sagansky (a former President of the CBS Entertainment
Division) on June 28, 1994, of 1,650 Shares at a price per Share of
approximately $259 per Share in respect of options exercised on such date having
an exercise price of approximately $160 per Share (550 Shares), $192 per Share
(550 Shares) and $237 per Share (550 Shares) and exercise by Mr. Jeffrey
Sagansky on June 29, 1994, of options in respect of 550 Shares having an
exercise price of approximately $182 per Share, (e) sale by Mr. James Warner
(President of the CBS Enterprises Division) on July 19, 1994, of 1,200 Shares at
a price of approximately $307 per Share in respect of options exercised on such
date having an exercise price of approximately $160 per Share (900 Shares) and
approximately $183 per Share (300 Shares) and (f) purchases by Mr. Howard
Stringer (President of the CBS/Broadcast Group) on June 3, 1994, of 100 Shares
at a price per Share of approximately $275 and on June 16, 1994, of 50 Shares at
a price per Share of approximately $263. The aforementioned purchases by the
Plan were made in the ordinary course of the Plan's investment activities.
Except as set forth in this Offer to Purchase, neither the Company nor, to
the best of the Company's knowledge, any of its affiliates, directors or
executive officers, or any of the executive officers or directors of its
subsidiaries, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Offer with respect to any securities of the Company (including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer of the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss or the
giving or withholding or proxies, consents or authorizations).
12. CERTAIN LEGAL MATTERS; REGULATORY AND FOREIGN APPROVALS
The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory authority
or agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Shares pursuant to the Offer. Should any such
approval or other action be required, the Company currently contemplates that it
will seek such approval or other action. The Company cannot predict whether it
may determine that it is required to delay the acceptance for payment of Shares
tendered pursuant to the Offer pending the outcome of any such matter. There can
be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that the failure
to obtain any such approval or other action might not result in adverse
consequences to the Company's business. The Company intends to make all required
filings under the Exchange Act and the New York State Security Takeover
Disclosure Act. The Company's obligation under the Offer to accept Shares for
payment is subject to certain conditions. See Section 6.
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Sales of Shares by shareholders pursuant to the Offer will be taxable
transactions for Federal income tax purposes and may also be taxable
transactions under applicable state, local, foreign and
27
<PAGE> 31
other tax laws. The Federal income tax consequences to a shareholder may vary
depending upon the shareholder's particular facts and circumstances.
Under Section 302 of the Internal Revenue Code of 1986, as amended (the
"Code"), a sale of Shares pursuant to the Offer will, as a general rule, be
treated as a sale or exchange if the receipt of cash upon such sale (a) is
"substantially disproportionate" with respect to the shareholder, (b) results in
a "complete redemption" of the shareholder's interest in the Company or (c) is
"not essentially equivalent to a dividend" with respect to the shareholder. If
any of those three tests is satisfied, a tendering shareholder will recognize
gain or loss equal to the difference between the amount of cash received by the
shareholder pursuant to the Offer and the shareholder's tax basis in the Shares
sold pursuant to the Offer. Recognized gain or loss will be capital gain or
loss, assuming the Shares are held as capital assets, which will be long-term
capital gain or loss if the Shares are held for more than one year.
In determining whether any of the tests under Section 302 of the Code is
satisfied, shareholders must take into account not only the Shares they actually
own, but also Shares they are deemed to own pursuant to the constructive
ownership rules of Section 318 of the Code. Pursuant to those constructive
ownership rules, a shareholder is deemed to own the Shares actually owned, and
in some cases constructively owned, by certain related individuals or entities,
and any Shares that the shareholder has the right to acquire by exercise of an
option or by conversion or exchange of a security.
The receipt of cash will be "substantially disproportionate" with respect
to a shareholder if the percentage of the outstanding voting stock of the
Company actually and constructively owned by the shareholder immediately
following the sale of Shares pursuant to the Offer (treating as no longer
outstanding all Shares purchased pursuant to the Offer) is less than 80% of the
percentage of the outstanding voting stock of the Company actually and
constructively owned by such shareholder immediately before the sale of Shares
pursuant to the Offer (treating as outstanding all Shares purchased pursuant to
the Offer). Shareholders should consult their tax advisors with respect to the
application of the "substantially disproportionate" test to their particular
facts and circumstances.
The receipt of cash by a shareholder will result in a "complete redemption"
of the shareholder's interest in the Company if either (a) all the Shares
actually and constructively owned by the shareholder are sold pursuant to the
Offer or (b) all the Shares actually owned by the shareholder are sold pursuant
to the Offer and the shareholder is eligible to waive and does effectively waive
attribution of all Shares constructively owned by the shareholder in accordance
with Section 302(c) of the Code.
Even if the receipt of cash by a shareholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, such
shareholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test, if the shareholder's sales of Shares pursuant to the Offer
results in a "meaningful reduction" in the shareholder's proportionate interest
in the Company. Whether the receipt of cash by a shareholder will be "not
essentially equivalent to a dividend" will depend upon the individual
shareholder's facts and circumstances. In certain circumstances, even a small
reduction in a shareholder's proportionate interest may satisfy this test. For
example, the Internal Revenue Service has indicated in a published ruling that a
3.3% reduction in the proportionate interest of a small minority (substantially
less than 1%) shareholder in a publicly held corporation who exercises no
control over corporate affairs constitutes such a "meaningful reduction".
Shareholders expecting to rely upon the "not essentially equivalent to a
dividend" test should, therefore, consult with tax advisors as to its
application in their particular situations.
It may be possible for a tendering shareholder to satisfy one of the above
three tests by contemporaneously selling or otherwise disposing of all or some
of the Shares that are actually or constructively owned by such shareholder but
are not purchased pursuant to the Offer. Correspondingly, a tendering
shareholder may not be able to satisfy one of the above three tests because of
contemporaneous acquisitions of Shares by such shareholder or a related party
whose Shares
28
<PAGE> 32
would be attributed to such shareholder. Shareholders should consult their tax
advisors regarding the tax consequences of such sales or acquisitions in their
particular circumstances.
If none of the three tests under Section 302 is satisfied and if, as is
anticipated, the Company has sufficient earnings and profits, the tendering
shareholder will be treated as having received a dividend includible in gross
income in an amount equal to the entire amount of cash received by the
shareholder pursuant to the Offer (without regard to gain or loss, if any).
In the case of a corporate shareholder, if the cash paid is treated as a
dividend, the dividend income may be eligible for the 70% dividends-received
deduction. The dividends-received deduction is subject to certain limitations,
and may not be available if the corporate shareholder does not satisfy certain
holding period requirements with respect to the Shares or if the Shares are
treated as "debt financed portfolio stock". Generally, if a dividends-received
deduction is available, it is expected that the dividend will be treated as an
"extraordinary dividend" under Section 1059(a) of the Code, in which case such
corporate shareholder's tax basis in Shares retained by such shareholder would
be reduced, but not below zero, by the amount of the nontaxed portion of the
dividend. Any amount of the nontaxed portion of the dividend in excess of the
shareholder's basis will generally be subject to tax upon sale or disposition of
those Shares. Corporate shareholders are urged to consult their tax advisors as
to the effect of Section 1059 of the Code on their tax basis in Shares.
A foreign shareholder may be subject to dividend withholding tax at the 30%
rate or a lower applicable treaty rate on the gross proceeds of the sale of
Shares pursuant to the Offer. Foreign shareholders should consult their tax
advisors regarding application of these withholding rules.
The foregoing discussion may not apply to Shares acquired pursuant to
certain compensation arrangements with the Company.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING
UPON, AMONG OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE TENDERING
SHAREHOLDER. NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN
TAX CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. SHAREHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SALES MADE BY THEM PURSUANT TO THE
OFFER AND THE EFFECT OF THE CONSTRUCTIVE STOCK OWNERSHIP RULES MENTIONED ABOVE.
14. EXTENSION OF THE TENDER PERIOD; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion, at any
time or from time to time and regardless of whether or not any of the events set
forth in Section 6 shall have occurred or shall be deemed by the Company to have
occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of any Shares by giving oral or written
notice of such extension to the Depositary and making a public announcement
thereof. During any such extension, all Shares previously tendered and not
purchased or withdrawn will remain subject to the Offer, except to the extent
that such Shares may be withdrawn as set forth in Section 4. The Company also
expressly reserves the right, in its sole discretion, to terminate the Offer and
not accept for payment any Shares not theretofore accepted for payment upon the
occurrence of any of the conditions specified in Section 6 by giving oral or
written notice of such termination to the Depositary and making a public
announcement thereof. Subject to compliance with applicable law, the Company
further reserves the right, in its sole discretion, and regardless of whether or
not any of the events set forth in Section 6 shall have occurred or shall be
deemed by the Company to have occurred, to amend the Offer in any respect
(including, without limitation, by decreasing or increasing the consideration
offered in the Offer to owners of Shares or by decreasing the number of Shares
being sought in the Offer) or to waive the limitation on the maximum number of
shares to be
29
<PAGE> 33
purchased pursuant to the Offer. Amendments to the Offer may be made at any time
or from time to time effected by public announcement thereof, such announcement,
in the case of an extension, to be issued no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
Any public announcement made pursuant to the Offer will be disseminated promptly
to shareholders in a manner reasonably designed to inform shareholders of such
change. Without limiting the manner in which the Company may choose to make a
public announcement, except as required by applicable law, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules provide that the
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of such terms or
information. The Commission has stated that, as a general rule, it is of the
view that an offer should remain open for a minimum of five business days from
the date that notice of such a material change is first published, sent or
given. If (a) the Company (i) increases or decreases the price to be paid for
Shares, (ii) increases the number of Shares being sought by an amount exceeding
2% of the outstanding Shares, (iii) decreases the number of Shares being sought
or (iv) waives the condition set forth in paragraph (g) of Section 6, and (b)
the Offer is scheduled to expire at any time earlier than the expiration of a
period ending on the tenth business day from and including the date that notice
of such increase, decrease or waiver is first published, sent or given, the
Offer will be extended until the expiration of such period of ten business days.
15. FEES AND EXPENSES
The Company has retained First Chicago Trust Company of New York as
Depositary, MacKenzie Partners, Inc. as Information Agent and Salomon Brothers
Inc as Dealer Manager in connection with the Offer. The Information Agent and
Dealer Manager will assist shareholders who request assistance in connection
with the Offer and may request brokers, dealers and other nominee shareholders
to forward materials relating to the Offer to beneficial owners. The Depositary,
Information Agent and Dealer Manager will receive reasonable and customary
compensation for their services in connection with the Offer and will also be
reimbursed for certain out-of-pocket expenses, including the reasonable fees and
expenses of their counsel. The Company has agreed to indemnify the Depositary,
Information Agent and Dealer Manager against certain liabilities in connection
with the Offer, including certain liabilities under the Federal securities laws.
None of the Depositary, Information Agent or Dealer Manager has been retained to
make solicitations or recommendations in their respective roles as Depositary,
Information Agent and Dealer Manager.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person (other than the Dealer Manager)
for soliciting any Shares pursuant to the Offer. The Company will, however, on
request, reimburse such persons for customary handling and mailing expenses
incurred in forwarding materials in respect of the Offer to the beneficial
owners for which they act as nominees. No such broker, dealer, commercial bank
or trust company has been authorized to act as the Company's agent for purposes
of this Offer. The Company will pay (or cause to be paid) any stock transfer
taxes on its purchase of Shares, except as otherwise provided in Instruction 6
of the Letter of Transmittal. Other than as described above, no solicitation or
similar fees will be paid to brokers, dealers or others by the Company in
connection with the Offer.
30
<PAGE> 34
16. MISCELLANEOUS
The Offer is not being made to, nor will the Company accept tenders from,
owners of Shares in any jurisdiction in which the Offer or its acceptance would
not be in compliance with the laws of such jurisdiction. The Company is not
aware of any jurisdiction where the making of the Offer or the tender of Shares
would not be in compliance with applicable law. If the Company becomes aware of
any jurisdiction where the making of the Offer or the tender of Shares is not in
compliance with any applicable law, the Company will make a good faith effort to
comply with such law. If, after such good faith effort, the Company cannot
comply with such law, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares residing in such
jurisdiction. In any jurisdiction in which the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer will
be deemed to be made on the Company's behalf by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
[LOGO]
July 25, 1994
31
<PAGE> 35
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each shareholder
of the Company or such shareholder's broker, dealer, commercial bank or trust
company to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
<TABLE>
<S> <C> <C>
By Hand or Overnight Delivery: By Facsimile Transmission By Mail:
(for Eligible Institutions
only):
First Chicago Trust Company (201) 222-4720 First Chicago Trust Company
of New York or of New York
Tenders & Exchanges (201) 222-4721 Tenders & Exchanges
Suite 4680-CBS Suite 4660
14 Wall Street, 8th Floor Confirm Receipt of P.O. Box 2560
New York, NY 10005 Notice of Jersey City, NJ 07303-2560
Guaranteed Delivery
by Telephone:
(201) 222-4707
</TABLE>
Any questions or requests for assistance or for additional copies of this Offer
to Purchase or the Letter of Transmittal may be directed to the Information
Agent or Dealer Manager. Shareholders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Offer.
The Information Agent for the Offer is:
LOGO
156 Fifth Avenue, 9th Floor
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll Free (800) 322-2885
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-1928 (call collect)
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
[LOGO]
PURSUANT TO ITS OFFER TO PURCHASE
DATED JULY 25, 1994
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, AUGUST 22, 1994, UNLESS THE OFFER IS EXTENDED.
<TABLE>
<S> <C>
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, Depositary
By Hand or Overnight Delivery: By Mail:
First Chicago Trust Company First Chicago Trust
of New York Company
Tenders & Exchanges of New York
Suite 4680 -- CBS Tenders & Exchanges
14 Wall Street, 8th Floor Suite 4660
New York, NY 10005 P.O. Box 2560
Jersey City, NJ 07303-2560
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
This Letter of Transmittal can be used only if (a) certificates for Shares
(as defined below) are to be delivered with it or (b) Shares are being delivered
concurrently by book-entry transfer to the account maintained by the Depositary
at The Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities") as set forth in Section 3 of the Offer to Purchase (as defined
below).
Shareholders who cannot deliver the certificates for their Shares to the
Depositary prior to the Expiration Date (as defined in the Offer to Purchase) or
who cannot complete the procedure for book-entry transfer on a timely basis or
who cannot deliver a Letter of Transmittal and all other required documents to
the Depositary prior to the Expiration Date, in any such case, must tender their
Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of
the Offer to Purchase. See Instruction 2.
A SHAREHOLDER OWNING BENEFICIALLY AS OF THE CLOSE OF BUSINESS ON JULY 8,
1994, WHO CONTINUES TO OWN BENEFICIALLY UNTIL THE EXPIRATION OF THE OFFER, AN
AGGREGATE OF 25 OR FEWER SHARES (EXCLUDING SHARES HELD IN THE COMPANY'S PLAN (AS
DEFINED IN THE OFFER TO PURCHASE)), AND WHO SATISFIES THE OTHER REQUIREMENTS SET
FORTH IN INSTRUCTION 8, MAY HAVE ALL SUCH SHARES PURCHASED BEFORE PRORATION, IF
ANY, OF THE PURCHASE OF OTHER SHARES PURSUANT TO THE OFFER.
The name(s) and address(es) of the registered holder(s) should be printed
below, if they are not already printed below, exactly as they appear on the
certificate(s) representing the Shares tendered herewith. The certificate(s) and
the number of Shares that the registered holder(s) wish(es) to tender should be
indicated in the appropriate boxes below.
<PAGE> 2
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS)
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON SHARES TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------
NUMBER OF NUMBER OF
CERTIFICATE SHARES REPRESENTED SHARES
NUMBER(S)* BY CERTIFICATE(S)* TENDERED**
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
TOTAL SHARES
</TABLE>
- --------------------------------------------------------------------------------
* Need not be completed by shareholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares
represented by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
- --------------------------------------------------------------------------------
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account No.
Transaction Code No.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Shareholder(s)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which Guaranteed Delivery
If delivery is by book-entry transfer:
Name of Tendering Institution
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account No.
Transaction Code No.
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to CBS Inc., a New York corporation (the
"Company"), the above-described shares of Common Stock, par value $2.50 per
share, of the Company (the "Shares"), pursuant to the Company's offer to
purchase 3,500,000 Shares at a price of $325 per Share (the "Purchase Price"),
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated July 25, 1994 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which together constitute the "Offer").
Subject to and effective upon acceptance for payment of the Shares tendered
herewith in accordance with the terms of the Offer (including, if the Offer is
extended or amended, the terms or conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Company all right, title and interest in and to all the Shares that
are being tendered hereby, or orders the registration of such Shares delivered
by book-entry transfer, that are purchased pursuant to the Offer and hereby
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(a) deliver certificates for such Shares, or transfer ownership of
such Shares on the account books maintained by any of the Book-Entry
Transfer Facilities, together, in any such case, with all accompanying
evidences of transfer and authenticity, to or upon the order of the
Company, upon receipt by the Depositary, as the undersigned's agent, of the
Purchase Price with respect to such Shares;
(b) present certificates for such Shares for cancellation and transfer
on the books of the Company; and
(c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of
the Offer.
The undersigned hereby represents and warrants that:
(a) the undersigned "owns" the Shares tendered hereby within the
meaning of Rule 14e-4 promulgated under the Securities Exchange Act of
1934, as amended, and has full power and authority to validly tender, sell,
assign and transfer the Shares tendered hereby;
(b) the tender of Shares by the undersigned complies with Rule 14e-4;
(c) when and to the extent the Company accepts the Shares for
purchase, the Company will acquire good, marketable and unencumbered title
to the Shares, free and clear of all security interests, liens, charges,
encumbrances, conditional sales agreements or other obligations relating to
their sale or transfer, and not subject to any adverse claim;
(d) on request, the undersigned will execute and deliver any
additional documents the Depositary or the Company deems necessary or
desirable to complete the assignment, transfer and purchase of the Shares
tendered hereby; and
(e) the undersigned has read and agrees to all the terms of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may not
be required to accept for payment any of the Shares tendered herewith or may
accept for payment, pro rata with Shares tendered by other shareholders, fewer
than all of the Shares tendered herewith.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
All authority herein conferred, or agreed to be conferred, shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
<PAGE> 4
Unless otherwise indicated under "Special Payment Instructions", please
issue the check for the Purchase Price and/or return or issue the certificate(s)
evidencing any Shares not tendered or not accepted for payment in the name(s) of
the registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the Purchase Price and/or the certificate(s)
evidencing any Shares not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the address of the registered holder(s) appearing
under "Description of Shares Tendered". In the event that both the "Special
Delivery Instructions" and "Special Payment Instructions" are completed, please
issue the check for the Purchase Price and/or issue or return the certificate(s)
evidencing any Shares not tendered or accepted for payment in the names(s) of,
and deliver said check and/or certificate(s) to, the person or persons so
indicated. In the case of book-entry delivery of Shares, please credit the
account maintained at the Book-Entry Transfer Facility indicated above with any
Shares not accepted for payment. The undersigned recognizes that the Company has
no obligation pursuant to the "Special Payment Instructions" to transfer any
Shares from the name(s) of the registered holder(s) thereof if the Company does
not accept for payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6, 7, 9 AND 10 )
To be completed ONLY if the check for the aggregate Purchase Price of
Shares purchased and/or certificates for Shares not tendered or not purchased
are to be issued in the name of someone other than the undersigned.
Issue / / check, and/or
/ / certificates to:
Name
(PLEASE PRINT)
Address
(ZIP CODE)
(TAXPAYER IDENTIFICATION NO.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if the check for the aggregate Purchase Price of
Shares purchased and/or certificates for Shares not tendered or not purchased
are to be mailed to someone other than the undersigned or to the undersigned at
an address other than that shown below the undersigned's signature(s).
Mail / / check, and/or
/ / certificates to:
Name
(PLEASE PRINT)
Address
(ZIP CODE)
<PAGE> 5
ODD LOTS
(SEE INSTRUCTION 8)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person owning beneficially as of the close of business on July 8,
1994, and continuing to own beneficially until the Expiration Date, an aggregate
of 25 or fewer Shares (excluding Shares held in the Plan).
The undersigned either (check one box):
/ / was the beneficial owner as of the close of business on July 8, 1994, and
will continue to be the beneficial owner until the Expiration Date, of an
aggregate of 25 or fewer Shares (excluding Shares held in the Plan), all of
which are being tendered, or
/ / is an "Eligible Institution" (as defined in the Offer to Purchase) that (i)
is tendering, for the beneficial owners thereof, Shares with respect to
which it is the record owner, and (ii) believes, based upon representations
made to it by each such beneficial owner, that such beneficial owner owned
beneficially as of the close of business on July 8, 1994, and will continue
to own beneficially until the Expiration Date, an aggregate of 25 or fewer
Shares (excluding Shares held in the Plan), and is tendering all of such
Shares,
and, in either case, hereby represents that the above indicated information
is true and correct as to the undersigned.
<PAGE> 6
SIGN HERE
(SEE INSTRUCTIONS 1 AND 5)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
SIGNATURE(S) OF OWNER(S)
Name(s)
(PLEASE PRINT)
Capacity (full title)
Address
(INCLUDE ZIP CODE)
Area Code and Telephone Number
Taxpayer Identification Number
Dated
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
Name
(PLEASE PRINT)
Title
Name of Firm
Address
(INCLUDE ZIP CODE)
Area Code and Telephone Number
Dated
<PAGE> 7
IMPORTANT TAX INFORMATION
Under U.S. Federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
shareholder's correct taxpayer identification number ("TIN") on Substitute Form
W-9 below. If the Depositary is not provided with the correct TIN, the Internal
Revenue Service may subject the shareholder or other payee to a $50 penalty. In
addition, payments that are made to such shareholder or other payee with respect
to Shares purchased pursuant to the Offer may be subject to 31% backup
withholding.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements and should indicate their status by writing "exempt" across the
face of the Substitute Form W-9. In order for a foreign individual to qualify as
an exempt recipient, the shareholder must submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the shareholder or other payee. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 2 is checked,
the shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below Part 2 in order to avoid backup
withholding. Notwithstanding that the box in Part 2 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Depositary will withhold 31% on all payments made prior to the time a properly
certified TIN is provided to the Depositary.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the certificates evidencing the Shares. If the Shares are
registered in more than one name or are not registered in the name of the actual
owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX
AT RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW Social Security Number
OR
SUBSTITUTE Employer Identification Number
FORM W-9
---------------------------------------------------------------------------------------
PART 2 -- Awaiting TIN / /
---------------------------------------------------------------------------------------
CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE
INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
NAME
(PLEASE PRINT)
ADDRESS
(INCLUDE ZIP CODE)
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN) Signature Date
</TABLE>
<PAGE> 8
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (b)
I intend to mail or deliver an application in the near future. I understand
that, notwithstanding that I have checked the box on Part 2 (and have completed
this Certificate of Awaiting Taxpayer Identification Number), all reportable
payments made to me prior to the time I provide the Depositary with a properly
certified taxpayer identification number will be subject to a 31% backup
withholding tax.
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------ ----------------------------------------
SIGNATURE DATE
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM W-9 MAY RESULT IN A BACKUP
WITHHOLDING OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES
Except as otherwise provided below, all signatures on this Letter of
Transmittal must be guaranteed by a firm which is an "Eligible Institution" (as
defined in the Offer to Purchase). Signatures on this Letter of Transmittal need
not be guaranteed if (a) this Letter of Transmittal is signed by the registered
owner of the Shares (which term, for purposes of this document, shall include
any participant in one of the Book-Entry Transfer Facilities whose name appears
on a security position listing as the owner of Shares) tendered herewith and
such holder(s) have not completed either of the boxes entitled "Special Payment
Instructions" or "Special Delivery Instructions" on this Letter of Transmittal
or (b) such Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. DELIVERY OF THE LETTER OF TRANSMITTAL AND SHARES
This Letter of Transmittal is to be used only if (a) certificates for
Shares are to be forwarded herewith or (b) delivery of Shares is to be made by
book-entry transfer pursuant to the procedures set forth in Section 3 of the
Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer of all Shares delivered electronically
into the Depositary's account at one of the Book-Entry Transfer Facilities,
together in each case with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) with any required signature guarantees, and
any other documents required by this Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the front page of this
Letter of Transmittal by the Expiration Date (as defined in the Offer to
Purchase). Delivery of documents to one of the Book-Entry Transfer Facilities
does not constitute delivery to the Depositary.
Shareholders who cannot deliver the certificates for their Shares to the
Depositary prior to the Expiration Date or who cannot complete the procedure for
book-entry transfer on a timely basis or who cannot deliver a Letter of
Transmittal and all other required documents to the Depositary by the Expiration
Date must tender their Shares pursuant to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery substantially in the
form provided by the Company must be received (by hand, mail or facsimile
transmission) by the Depositary by the Expiration Date and (c) the certificates
for all physically delivered Shares, in proper form for transfer (or a
confirmation of a
<PAGE> 9
book-entry transfer of such Shares into the Depositary's account at one of the
Book-Entry Transfer Facilities), together with a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) and any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Depositary within five New York Stock
Exchange trading days after the date of execution of such Notice of Guaranteed
Delivery, all as provided in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF
DELIVERY IS MADE BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED.
No alternative, conditional, or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
facsimile thereof), each tendering shareholder waives any right to receive any
notice of the acceptance of such shareholder's tender.
3. INADEQUATE SPACE
If the space provided in the box captioned "Description of Shares Tendered"
is inadequate, the certificate numbers and/or the number of Shares should be
listed on a separate signed schedule and attached to this Letter of Transmittal.
4. PARTIAL TENDERS AND UNPURCHASED SHARES
(Not applicable to shareholders who deliver Shares by book-entry transfer.)
If fewer than all the Shares represented by any certificate delivered to the
Depositary are to be tendered, fill in the number of Shares that are to be
tendered in the box entitled "Number of Shares Tendered". If such Shares are
purchased, a new certificate for the remainder of the Shares represented by the
old certificate(s) will be sent to and in the name of the registered holder(s)
(unless otherwise provided by such holder(s) having completed either of the
boxes entitled "Special Payment Instructions" or "Special Delivery Instructions"
on this Letter of Transmittal) as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by the
certificate(s) listed and delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON THE LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS
(a) If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered herewith, the signature(s) must correspond
with the name(s) as written on the face of the certificates without any
change whatsoever.
(b) If any of the Shares tendered herewith are registered in the names
of two or more joint owners, each such owner must sign this Letter of
Transmittal.
(c) If any of the Shares tendered herewith are registered in different
names on different certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal as there are different
registrations of certificates.
(d) If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered herewith, no endorsements of certificates
or separate stock powers are required unless payment is to be made, and/or
the certificates for Shares not tendered or not purchased are to be issued,
in the name(s) of any person(s) other than the registered holder(s). If
this Letter of Transmittal is signed by a person other than the registered
holder(s) of the Shares tendered herewith, however, the certificates must
be endorsed or accompanied by appropriate stock powers, in either case,
signed exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Shares. Signature(s) on any such certificates or
stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
(e) If this Letter of Transmittal or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing and
proper evidence satisfactory to the Company of the authority of such person
so to act must be submitted.
<PAGE> 10
6. STOCK TRANSFER TAXES
The Company will pay any stock transfer taxes with respect to the transfer
and sale of Shares to it or its order pursuant to the Offer. If, however,
payment of the Purchase Price is to be made to, or if certificates for Shares
not tendered or accepted for purchase are to be registered in the name of any
person other than the registered holder, or if tendered certificates are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder or such person) payable on account of the transfer to
such person will be deducted from the Purchase Price unless satisfactory
evidence of the payment of such taxes or exemption therefrom is submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS
If the check for the Purchase Price of any Shares purchased is to be issued
to, or any Shares not tendered or not purchased are to be returned in the name
of, a person other than the person(s) signing this Letter of Transmittal or if
the check or any certificates for Shares not tendered or not purchased are to be
mailed to someone other than the person(s) signing this Letter of Transmittal or
to the person(s) signing this Letter of Transmittal at an address other than
that shown in the box entitled "Description of Shares Tendered", the boxes
entitled "Special Payment Instructions" and/or "Special Delivery Instructions"
on this Letter of Transmittal should be completed.
8. ODD LOTS
As described in Sections 1 and 2 of the Offer to Purchase, if fewer than
all Shares properly tendered and not withdrawn prior to the Expiration Date are
to be purchased, the Shares purchased first will consist of all Shares tendered
by any shareholder who owned beneficially an aggregate of 25 or fewer Shares
(excluding Shares held in the Plan) as of the close of business on July 8, 1994,
and continued to own beneficially such Shares until the Expiration Date, who
properly tendered all such Shares (partial tenders of Shares will not qualify
for this preference) and who completes the box captioned "Odd Lots" in this
Letter of Transmittal and, if applicable, the Notice of Guaranteed Delivery.
9. FEDERAL INCOME TAX WITHHOLDING
Except as provided above under "Important Tax Information", each tendering
shareholder is required to provide the Depositary with a correct TIN on
Substitute Form W-9 which is provided under "Important Tax Information" above.
Failure to provide the information on the form may subject the tendering
shareholder to a $50 penalty and 31% Federal backup withholding tax may be
imposed on the payments made to the shareholder or other payee with respect to
Shares purchased pursuant to the Offer.
10. WITHHOLDING ON FOREIGN SHAREHOLDERS
The Depositary will withhold Federal income taxes equal to 30% of the gross
payments payable to a foreign shareholder unless such foreign shareholder proves
in a manner satisfactory to the Company and the Depositary that either (i) the
sale of its Shares pursuant to the Offer will qualify as a sale or exchange,
rather than as a dividend, for Federal income tax purposes (as described in
Section 13 of the Offer to Purchase), in which case no withholding will be
required, or (ii) the foreign shareholder is eligible for a reduced tax treaty
rate with respect to dividend income, in which case the Depositary will withhold
at the reduced treaty rate. For this purpose, a foreign shareholder is any
shareholder that is not (i) an individual citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States or any political subdivision thereof or
(iii) any estate or trust the income of which is subject to United States
Federal income taxation regardless of the source of such income. The Depositary
will determine a shareholder's status as a foreign shareholder and eligibility
for a tax treaty reduced rate of withholding by reference to the shareholder's
address and to any outstanding certificates or statements concerning eligibility
for a reduced rate of withholding unless facts and circumstances indicate that
reliance is not warranted. A foreign shareholder who has not previously
submitted the appropriate certificates or statements with respect to a reduced
rate of withholding for which such shareholder may be eligible should consider
doing so in order to avoid overwithholding. A foreign shareholder may be
eligible to obtain from the U.S. Internal Revenue Service a refund of tax
withheld if such shareholder meets one of the three tests for sale or exchange
treatment described in Section 13 of the Offer to Purchase or is otherwise able
to establish that no tax or reduced amount of tax was due.
<PAGE> 11
11. IRREGULARITIES
All questions as to the number of Shares to be accepted and the validity,
form, eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Company, in its sole discretion, and
its determination shall be final and binding on all parties. The Company
reserves the absolute right to reject any or all tenders it determines not to be
in proper form or the acceptance of or payment for which may, in the opinion of
the Company's counsel, be unlawful. The Company also reserves the absolute right
to waive any of the conditions of the Offer or any defect or irregularity in the
tender of any particular Shares. No tender of Shares will be deemed to be
properly made until all defects and irregularities have been cured or waived.
Unless waived, any defects or irregularities in connection with tenders must be
cured within such time as the Company shall determine. None of the Company, the
Depositary, the Information Agent nor any other person is or will be obligated
to give notice of any defects or irregularities in tenders, and none of them
will incur any liability for failure to give such notice.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES
Requests for assistance or additional copies of the Offer to Purchase and
this Letter of Transmittal may be obtained from the Information Agent or Dealer
Manager at their respective addresses or telephone numbers set forth below.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF
(TOGETHER WITH CERTIFICATES FOR SHARES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OF
SHARES AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST
BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE.
The Information Agent for the Offer is:
[LOGO]
156 Fifth Avenue, 9th Floor
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll Free (800) 322-2885
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-1928 (call collect)
<PAGE> 1
[LOGO]
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
This form or a facsimile hereof must be used to accept the Offer (as
defined below) if:
(a) certificates for shares of Common Stock, par value $2.50 per share
(the "Shares"), of CBS Inc., a New York corporation (the "Company"), cannot
be delivered to the Depositary prior to the Expiration Date (as defined in
Section 1 of the Company's Offer to Purchase dated July 25, 1994 (the
"Offer to Purchase")); or
(b) the procedure for book-entry transfer (set forth in Section 3 of
the Offer to Purchase) cannot be completed on a timely basis; or
(c) the Letter of Transmittal (or a facsimile thereof) and all other
required documents cannot be delivered to the Depositary prior to the
Expiration Date.
This form, properly completed and duly executed, may be delivered by hand,
mail or facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, Depositary
<TABLE>
<S> <C> <C>
By Hand or Overnight Delivery: By Facsimile Transmission By Mail:
(for Eligible Institutions
only):
First Chicago Trust Company (201) 222-4720 First Chicago Trust Company
of New York or of New York
Tenders & Exchanges (201) 222-4721 Tenders & Exchanges
Suite 4680-CBS Suite 4660
14 Wall Street, 8th Floor Confirm Receipt of P.O. Box 2560
New York, NY 10005 Notice of Guaranteed Jersey City, NJ 07303-2560
Delivery by Telephone:
(201) 222-4707
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR A
TRANSMISSION OF INSTRUCTIONS
TO A FACSIMILE NUMBER OTHER THAN THE ONES LISTED ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
(as defined in the Offer to Purchase) under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject
to the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which together constitute the "Offer"), receipt of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase.
ODD LOTS
(See Instruction 8 of the Letter of Transmittal)
The undersigned either (check one box):
/ / was the beneficial owner as of the close of business on July 8, 1994, and
will continue to be the beneficial owner until the Expiration Date (as defined
in the Offer to Purchase), of an aggregate of 25 or fewer Shares (excluding
Shares held in the Company's Employee Investment Fund), all of which are being
tendered, or
/ / is an "Eligible Institution" that (i) is tendering, for the beneficial
owners thereof, Shares with respect to which it is the record owner, and (ii)
believes, based upon representations made to it by each such beneficial owner,
that such beneficial owner owned as of the close of business on July 8, 1994,
and will continue to own beneficially until the Expiration Date, an aggregate of
25 or fewer Shares (excluding Shares held in the Company's Employee Investment
Fund), and is tendering all of such Shares.
<PAGE> 2
No. of Shares
tendered
SIGN HERE
__________________ Shares
Certificate Nos. _______________________________
(SIGNATURE(S))
(if available):
_________________________________ _______________________________
(SIGNATURE(S))
_________________________________ _______________________________
(NAME(S)) (PLEASE PRINT)
If Shares will be delivered by
book-entry transfer:
______________________________
(ADDRESS)
Name of Tendering Institution:
__________________________________ ______________________________
(ZIP CODE)
Account No.:______________________ _______________________________
(AREA CODE AND TELEPHONE NO.)
at:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an "Eligible Institution", guarantees (a) that the above
named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended, (b) that such
tender of Shares complies with Rule 14e-4 and (c) to deliver to the Depositary
either the stock certificates representing the Shares tendered hereby, in proper
form for transfer, or confirmation of the book-entry transfer of such Shares
into the Depositary's account at The Depository Trust Company, Midwest
Securities Trust Company or Philadelphia Depository Trust Company, in any such
case together with a properly completed and duly executed Letter(s) of
Transmittal (or facsimile(s) thereof) and any other required documents, all
within five New York Stock Exchange trading days after the date of execution of
this notice.
______________________________
(NAME OF FIRM)
______________________________
(AUTHORIZED SIGNATURE)
_____________________________
(NAME)
_____________________________
(ADDRESS)
_____________________________
(ZIP CODE)
Dated: ____________________________ ______________________________
(AREA CODE AND TELEPHONE NO.)
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE
SENT WITH THE LETTER OF TRANSMITTAL.
<PAGE> 1
[SALOMON LETTERHEAD]
OFFER TO PURCHASE FOR CASH
3,500,000 SHARES OF COMMON STOCK OF
[CBS LOGO]
AT $325 NET PER SHARE
July 25, 1994
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We have been appointed Dealer Manager by CBS Inc., a New York corporation
(the "Company"), in connection with its offer to purchase 3,500,000 shares of
its Common Stock, par value $2.50 per share (such shares together with all other
outstanding shares of Common Stock of the Company are herein referred to as the
"Shares"), at a price of $325 per Share, upon the terms and subject to the
conditions set forth in the Company's Offer to Purchase dated July 25, 1994 (the
"Offer to Purchase"), and the related Letter of Transmittal (which together
constitute the "Offer").
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated July 25, 1994;
2. Letter of Transmittal for your use and for the information of your
clients, together with Guidelines for Certification of Taxpayer Number
on a Substitute Form W-9 providing information relating to backup
Federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (as defined in the Offer to Purchase);
4. A form of letter that may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to
the Offer;
5. Letter of the Chairman, President and Chief Executive Officer of the
Company dated July 25, 1994; and
6. Return envelope addressed to First Chicago Trust Company of New York,
the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 8:00 P.M., NEW
YORK CITY TIME, ON MONDAY, AUGUST 22, 1994, UNLESS THE OFFER IS EXTENDED.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY SHAREHOLDER SHOULD TENDER ANY OR ALL OF SUCH SHAREHOLDER'S SHARES
PURSUANT TO THE OFFER. EACH SHAREHOLDER MUST MAKE ITS OWN DECISION WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. L. T. HOLDING CORP., A
WHOLLY OWNED SUBSIDIARY OF LOEWS CORPORATION, HAS ADVISED THE COMPANY OF ITS
INTENTION TO TENDER NO FEWER THAN 2 MILLION OF THE APPROXIMATELY 3.03 MILLION
SHARES OWNED BY IT, AND THAT IT MAY TENDER ALL OF THE SHARES OWNED BY IT.
The Company will not pay any fees or commissions to any broker or dealer or
other person (other than the Dealer Manager) for soliciting tenders of Shares
pursuant to the Offer. The Company will, however, upon request, reimburse
brokers, dealers, commercial banks and trust companies for reasonable and
necessary costs
<PAGE> 2
and expenses incurred by them in forwarding materials to their customers. The
Company will pay all stock transfer taxes applicable to its purchase of Shares
pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the Dealer Manager at the addresses and telephone numbers
set forth on the back cover of the Offer to Purchase.
Very truly yours,
Salomon Brothers Inc
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, THE INFORMATION AGENT, THE DEALER MANAGER OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
[LOGO]
OFFER TO PURCHASE FOR CASH
3,500,000 SHARES OF ITS COMMON STOCK
AT $325 NET PER SHARE
July 25, 1994
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated July 25,
1994, and the related Letter of Transmittal (which together constitute the
"Offer"), in connection with the Offer by CBS Inc., a New York corporation (the
"Company"), to purchase 3,500,000 shares of its Common Stock, par value $2.50
per share (such shares together with all other outstanding shares of Common
Stock of the Company are herein referred to as the "Shares"), at a price of $325
per Share, upon the terms and subject to the conditions of the Offer. We are the
holder of record of Shares held for your account. A tender of such Shares can be
made only by us as the holder of record and pursuant to your instructions. THE
LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT
BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
1. The Offer, proration period and withdrawal rights expire at 8:00 p.m.,
New York City time, on Monday, August 22, 1994, unless the Offer is extended.
2. The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain conditions, including that
L. T. Holding Corp., a wholly owned subsidiary of Loews Corporation ("Holding"),
the Company's largest shareholder, tender, and not withdraw, at least 1 million
Shares beneficially owned by it. HOLDING HAS ADVISED THE COMPANY OF ITS
INTENTION TO TENDER NO FEWER THAN 2 MILLION OF THE APPROXIMATELY 3.03 MILLION
SHARES OWNED BY IT, AND THAT IT MAY TENDER ALL OF THE SHARES OWNED BY IT.
3. Any stock transfer taxes applicable to the sale of Shares to the Company
pursuant to the Offer will be paid by the Company, except as otherwise provided
in Instruction 6 of the Letter of Transmittal.
4. If you owned beneficially as of the close of business on July 8, 1994,
and continue to beneficially own until the expiration of the Offer, an aggregate
of 25 or fewer Shares (excluding Shares held in the Company's Employee
Investment Fund) and you instruct us to tender on your behalf all such Shares
prior to the expiration of the Offer and check the box captioned "Odd Lots" in
the instruction form, all such Shares will be accepted for purchase before
proration, if any, of the purchase of other Shares properly tendered.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the attached instruction form.
An envelope to return your instructions to us is enclosed. If you authorize
tender of your Shares, all such Shares will be tendered unless otherwise
specified on the attached instruction form. Your instructions should be
forwarded to us in ample time to permit us to submit a tender on your behalf by
the expiration of the Offer.
As described in the Offer to Purchase, if fewer than all Shares validly
tendered prior to the expiration of the Offer are to be purchased by the
Company, the Company will purchase Shares in the following order of priority:
(a) all Shares tendered prior to the expiration of the Offer by any shareholder
who owned beneficially as of the close of business on July 8, 1994, and
continues to beneficially own until the expiration of the Offer,
<PAGE> 2
an aggregate of 25 or fewer Shares (excluding Shares held in the Company's
Employee Investment Fund), and who validly tenders all of such Shares (partial
tenders will not qualify for this preference); and (b) then, after purchase of
all of the foregoing Shares, all other Shares validly tendered and not withdrawn
prior to the expiration of the Offer on a pro rata basis, if necessary (with
appropriate adjustments to avoid purchases of fractional Shares).
THE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM OR ON
BEHALF OF, HOLDERS OF SHARES IN ANY JURISDICTION IN WHICH THE MAKING OF THE
OFFER OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH
JURISDICTION. IN THOSE JURISDICTIONS THE LAWS OF WHICH REQUIRE THAT THE OFFER BE
MADE BY A LICENSED BROKER OR DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON
BEHALF OF THE COMPANY BY ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED
UNDER THE LAWS OF SUCH JURISDICTION.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO OFFER TO PURCHASE FOR CASH
3,500,000 SHARES OF COMMON STOCK
OF
[LOGO]
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated July 25, 1994, and the related Letter of Transmittal in
connection with the Offer by CBS Inc. (the "Company") to purchase 3,500,000
shares of its Common Stock, par value $2.50 per share (such shares together with
all other outstanding shares of Common Stock of the Company are herein referred
to as the "Shares"), at a price of $325 per Share, net to the undersigned in
cash.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
/ / By checking this box, all Shares held for the account of the undersigned,
including fractional Shares, will be tendered. If fewer than all Shares are
to be tendered, please check the box and indicate below the aggregate number
of Shares to be tendered.
_____________________ Shares*
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held for the
account of the undersigned are to be tendered.
ODD LOTS
/ / By checking this box, the undersigned represent(s) that the undersigned
owned beneficially as of the close of business on July 8, 1994, and will
continue to beneficially own until the expiration of the Offer, an aggregate
of 25 or fewer Shares (excluding Shares held in the Company's Employee
Investment Fund) and is tendering all such Shares.
SIGN HERE
<TABLE>
<S> <C>
___________________________________ ______________________________
SIGNATURE(S)
___________________________________ ______________________________
___________________________________ ______________________________
___________________________________ ______________________________
PLEASE PRINT NAME(S) AND ADDRESS(ES) HERE
Dated _____________________________
</TABLE>
3
<PAGE> 1
[LETTERHEAD OF]
CBS INC.
July 25, 1994
To Our Shareholders:
CBS Inc. is offering to purchase 3,500,000 shares of its Common Stock from
its shareholders at a price of $325 per share. We believe that a repurchase of
shares is the best use for a substantial portion of the cash and marketable
securities CBS holds. This offer will provide CBS shareholders with the
opportunity to receive a premium over current market prices of CBS shares for a
significant portion of their shares while retaining an equity investment in CBS.
At the conclusion of the offer, CBS will continue to hold cash and marketable
securities of over $100 million and will remain fully capable of funding its
current operations.
The offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you wish to tender your shares, the instructions for
tendering are also set forth in detail in the enclosed materials. I encourage
you to read these materials carefully before making any decision with respect to
the offer. Neither CBS nor its Board of Directors makes any recommendation as to
whether any shareholder should tender any or all of such shareholder's shares
pursuant to the offer. Each shareholder must decide whether to tender shares
and, if so, how many shares to tender. CBS has been advised that L. T. Holding
Corp., a wholly owned subsidiary of Loews Corporation, intends to tender no
fewer than 2 million of the approximately 3.03 million Shares owned by it, and
that it may tender all of the Shares owned by it.
If you have any questions regarding the offer, please call MacKenzie
Partners, Inc., the Information Agent for the offer, or Salomon Brothers Inc,
the Dealer Manager for the offer, at the appropriate telephone number set forth
on the back cover of the Offer to Purchase.
Very truly yours,
Laurence A. Tisch
Chairman, President and Chief
Executive Officer
<PAGE> 1
NOTICE TO PARTICIPANTS IN THE CBS INC.
EMPLOYEE INVESTMENT FUND
AND PARTICIPANTS IN THE CBS NEWS
SPECIAL PROJECTS INC. EMPLOYEE INVESTMENT FUND
OFFER BY
[ LOGO ]
TO PURCHASE FOR CASH
3,500,000 SHARES OF ITS COMMON STOCK
July 25, 1994
To Participants in the CBS Inc.
Employee Investment Fund and the CBS News
Special Projects Inc. Employee Investment Fund:
Enclosed for your consideration is an Offer to Purchase of CBS Inc. (the
"Company") dated July 25, 1994 (the "Offer to Purchase"), pursuant to which the
Company is offering to purchase 3,500,000 shares of its Common Stock, par value
$2.50 per Share (such shares together with all other outstanding shares of
Common Stock of the Company are herein referred to as the "Shares"), at a price
of $325 per Share, upon the terms and subject to the conditions set forth in the
Offer to Purchase.
As a participant in the CBS Inc. Employee Investment Fund or the CBS News
Special Projects Inc. Employee Investment Fund (collectively, the "Plan"), you
are the beneficial owner of an interest in Shares held under the Plan but which
are not registered in your name with the Company. A tender of your interest in
Shares held under the Plan may only be made by Boston Safe Deposit and Trust
Company (the "Trustee"), in its capacity as Trustee and the holder of record.
Under the Employee Retirement Income Security Act of 1974 ("ERISA"), the Trustee
may be obligated to take action and make an independent decision irrespective of
direction given by participants. Accordingly, although your instructions are
being solicited for the Trustee's information and will be given due
consideration by it, the Trustee is not bound under ERISA by such instructions
and accordingly may tender Shares or may not tender Shares, as the case may be,
contrary to your designation. Of course, your direction as to the subsequent
reinvestment of the proceeds from the tendered Shares will be followed by the
Trustee. Proceeds, if any, from the tender of your interest in Shares held under
the Plan will be reinvested in the Employee Investment Fund in Funds A, B, D or
E, at your option (see description on related instruction form). If no Fund is
designated for reinvestment, any proceeds will be reinvested in Fund D. Proceeds
that arise from Shares tendered and purchased from Fund C will be restricted and
not available for withdrawal or loans except as provided in Fund C.
If you wish to have the Trustee tender Shares represented by C units and D
units, if any, credited to your accounts under the Plan, please so instruct the
Trustee by completing, executing and returning to the Trustee the enclosed
instruction form. If you direct the tender of your interest in such Shares and
the Trustee does not make a contrary independent decision, your entire interest
will be tendered; partial tenders are not permitted for this purpose.
IN THE EVENT THAT THE TRUSTEE DOES NOT RECEIVE INSTRUCTIONS FROM YOU BY
5:00 P.M., NEW YORK CITY TIME, ON AUGUST 18, 1994, AND DOES NOT MAKE A CONTRARY
INDEPENDENT DECISION, SHARES REPRESENTED BY C UNITS AND D UNITS, IF ANY,
CREDITED TO YOUR ACCOUNTS UNDER THE PLAN WILL NOT BE TENDERED ON YOUR BEHALF.
ANY INSTRUCTIONS RECEIVED BY THE TRUSTEE SUBSEQUENT TO THE DATE AND TIME
SPECIFIED ABOVE AND PRIOR TO THE EXPIRATION OF THE OFFER (THAT BEING 8:00 P.M.,
NEW YORK CITY TIME, ON AUGUST 22, 1994) WILL BE HANDLED BY THE TRUSTEE ON A BEST
EFFORTS BASIS.
<PAGE> 2
THE ENCLOSED INSTRUCTION FORM RELATES ONLY TO SHARES HELD ON YOUR BEHALF
UNDER THE PLAN. ACCORDINGLY, DO NOT USE THE ENCLOSED INSTRUCTION FORM TO TENDER
SHARES REGISTERED IN YOUR OWN NAME. A TENDER OF SHARES HELD IN YOUR NAME MAY BE
MADE ONLY BY DELIVERING A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL TO THE
DEPOSITARY FOR THE OFFER ON OR PRIOR TO THE EXPIRATION OF THE OFFER.
As more fully described in Section 4 of the Offer to Purchase, tenders will
be deemed irrevocable unless withdrawn by the expiration date of the offer. To
be effective, a notice of withdrawal must be in writing and must be received by
the Trustee at the address set forth below by 5:00 p.m., New York City time, on
August 18, 1994. Any notice of withdrawal must specify your name, your social
security number, the name of the Plan and that the interest in Shares which you
requested the Trustee to tender is to be withdrawn. Upon receipt of a timely
written notice of withdrawal, previous instructions to tender with respect to
your interest in Shares held under the Plan will be deemed cancelled and, except
as contemplated by the second paragraph hereof, the Trustee will not tender any
interest in such Shares on your behalf. You may request the Trustee to retender
any interest in such Shares withdrawn by following the instructions for
tendering set forth above.
YOUR INSTRUCTIONS TO THE TRUSTEE SHOULD BE FORWARDED AS PROMPTLY AS
POSSIBLE (AND IN ANY EVENT MUST BE RECEIVED BY THE TRUSTEE BY 5:00 P.M., NEW
YORK CITY TIME, ON AUGUST 18, 1994). THE OFFER, PRORATION PERIOD AND WITHDRAWAL
RIGHTS EXPIRE AT 8:00 P.M., NEW YORK CITY TIME, ON MONDAY, AUGUST 22, 1994,
UNLESS THE OFFER IS EXTENDED.
NONE OF THE COMPANY, ITS BOARD OF DIRECTORS OR THE TRUSTEE MAKES ANY
RECOMMENDATION AS TO WHETHER ANY PARTICIPANT SHOULD INSTRUCT THE TRUSTEE TO
TENDER SUCH PARTICIPANT'S INTEREST IN SHARES HELD UNDER THE PLAN. EACH
PARTICIPANT MUST MAKE HIS OR HER OWN DECISION WHETHER TO INSTRUCT THE TRUSTEE TO
TENDER. L.T. HOLDING CORP., A WHOLLY OWNED SUBSIDIARY OF LOEWS CORPORATION, HAS
ADVISED THE COMPANY OF ITS INTENTION TO TENDER NO FEWER THAN 2 MILLION OF THE
APPROXIMATELY 3.03 MILLION SHARES OWNED BY IT, AND THAT IT MAY TENDER ALL OF THE
SHARES OWNED BY IT.
Please note that, under certain circumstances set forth in the Offer to
Purchase, the Company may terminate or amend the offer or may not be required to
accept for payment any of the Shares tendered or may accept for payment, pro
rata with Shares tendered by other shareholders, fewer than all the Shares
tendered by any shareholder.
The enclosed instruction form may be delivered (a) by hand or overnight
courier to Boston Safe Deposit and Trust Company, 1 Cabot Road, 028-004G,
Medford, MA 02155, Attention: Joyce P. Dardonis, (b) by regular mail in the
enclosed return envelope to Boston Safe Deposit and Trust Company, 1 Boston
Place, Boston, MA 02106 or (c) by facsimile to Boston Safe Deposit and Trust
Company (telecopy no.: 617-382-9533; telephone confirmation no.: 617-382-9967),
Attention: Joyce P. Dardonis.
Very truly yours,
Boston Safe Deposit and Trust Company,
as Trustee for the CBS Inc. Employee
Investment Fund and the CBS News
Special
Projects Inc. Employee Investment Fund
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
3,500,000 SHARES OF COMMON STOCK
OF
CBS INC.
The undersigned acknowledge(s) receipt of the Offer to Purchase dated July
25, 1994, in connection with the offer by CBS Inc. (the "Company") to purchase
3,500,000 shares of its Common Stock, par value $2.50 per share (such shares
together with all other outstanding shares of Common Stock of the Company are
herein referred to as the "Shares"), at a price of $325 per Share, net to the
undersigned in cash.
This will instruct Boston Safe Deposit and Trust Company, as Trustee under
the CBS Inc. Employee Investment Fund or the CBS News Special Projects Inc.
Employee Investment Fund, as the case may be (the "Trustee"), to tender the
Shares represented by the C units and D units, if any, credited to the accounts
of the undersigned under the CBS Inc. Employee Investment Fund or the CBS News
Special Projects Inc. Employee Investment Fund, as the case may be, upon the
terms and subject to the conditions set forth in the Offer to Purchase, and to
reinvest the proceeds, if any, from the tender offer in the Fund designated
below.
SIGN HERE
REINVESTMENT FUND (check one) / / A / / B / / D / / E (see description on
reverse)
IF NO FUND IS DESIGNATED FOR REINVESTMENT, ANY PROCEEDS WILL BE REINVESTED IN
FUND D.
_____________________________________________________________________________
SIGNATURE(S)
_____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
PLEASE PRINT NAME(S) AND ADDRESS(ES) HERE
____________________________________________________________________________
PLEASE PRINT SOCIAL SECURITY NUMBER
Dated ______________________________________________________________________
3
<PAGE> 4
FUND DESCRIPTION
The following is a brief description of Funds A, B, D and E:
FUND A
An Equity Fund whose earnings will fluctuate according to the gain or loss
incurred by the portfolio of stocks in this Fund. An outside investment firm
chooses the investment in stocks of companies in accordance with objectives
which seek to preserve principal, preserve purchasing power and provide
consistent and positive return.
FUND B
A Fixed Income Fund -- Currently the investment consists of several Fixed
Income Contracts with the Equitable Life Assurance Company, Aetna, Bankers Trust
and New York Life Insurance.
FUND D
Employee contributions which have been designated by participants for
investment in CBS Common Stock.
FUND E
The Composite Fund seeks long-term asset growth by balancing the higher
return potential of strategically selected growth and value stocks with the
income stability offered by intermediate-term bonds.
4
<PAGE> 5
NOTICE TO PARTICIPANTS IN THE CBS INC.
DIVIDEND REINVESTMENT PLAN
OFFER BY
[LOGO]
TO PURCHASE FOR CASH
3,500,000 SHARES OF ITS COMMON STOCK
July 25, 1994
To Participants in the CBS Inc.
Dividend Reinvestment Plan:
Enclosed for your consideration is an Offer to Purchase of CBS Inc. (the
"Company") dated July 25, 1994 (the "Offer to Purchase"), pursuant to which the
Company is offering to purchase 3,500,000 shares of its Common Stock, par value
$2.50 per share (such shares together with all other outstanding shares of
Common Stock of the Company are herein referred to as the "Shares"), at a price
of $325 per Share, upon the terms and subject to the conditions set forth in the
Offer to Purchase.
As a participant in the CBS Inc. Dividend Reinvestment Plan (the "Plan"),
you are the beneficial owner of Shares held under the Plan but which are not
registered in your name with the Company. A tender of your Shares held under the
Plan may only be made by First Chicago Trust Company of New York (the "Agent"),
in its capacity as agent for participants in the Plan and the holder of record,
and pursuant to your instructions.
Accordingly, the Agent will require instructions as to whether you wish the
Agent to tender any or all of your Shares held under the Plan upon the terms and
subject to the conditions set forth in the Offer to Purchase. If you wish to
have the Agent tender Shares credited to your account under the Plan, please so
instruct the Agent by completing, executing and returning to the Agent the
enclosed instruction form.
THE ENCLOSED INSTRUCTION FORM RELATES ONLY TO SHARES HELD ON YOUR BEHALF
UNDER THE PLAN. ACCORDINGLY, DO NOT USE THE ENCLOSED INSTRUCTION FORM TO TENDER
SHARES REGISTERED IN YOUR OWN NAME. A TENDER OF SHARES HELD IN YOUR NAME MAY BE
MADE ONLY BY DELIVERING A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL TO THE
DEPOSITARY FOR THE OFFER ON OR PRIOR TO THE EXPIRATION OF THE OFFER.
As more fully described in Section 4 of the Offer to Purchase, tenders will
be deemed irrevocable unless withdrawn by the expiration date of the offer. To
be effective, a notice of withdrawal must be in writing and must be received by
the Agent at the address set forth below by 8:00 p.m., New York City time, on
August 22, 1994. Any notice of withdrawal must specify your name, your social
security number, the name of the Plan and that the Shares which you requested
the Agent to tender are to be withdrawn. Upon receipt of a timely written notice
of withdrawal, previous instructions to tender your Shares held under the Plan
will be deemed cancelled and the Agent will not tender any such Shares on your
behalf. You may request the Agent to retender any such Shares withdrawn by
following the instructions for tendering set forth above.
<PAGE> 6
YOUR INSTRUCTIONS TO THE AGENT SHOULD BE FORWARDED AS PROMPTLY AS POSSIBLE
(AND IN ANY EVENT MUST BE RECEIVED BY THE AGENT BY 5:00 P.M., NEW YORK CITY
TIME, ON AUGUST 22, 1994) IN ORDER TO PERMIT THE AGENT TO SUBMIT A TENDER ON
YOUR BEHALF IN ACCORDANCE WITH THE PROVISIONS OF THE OFFER TO PURCHASE. THE
OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 8:00 P.M., NEW YORK CITY
TIME, ON AUGUST 22, 1994, UNLESS THE OFFER IS EXTENDED.
NONE OF THE COMPANY, ITS BOARD OF DIRECTORS OR THE AGENT MAKES ANY
RECOMMENDATION AS TO WHETHER ANY PARTICIPANT SHOULD INSTRUCT THE AGENT TO TENDER
ANY OR ALL OF SUCH PARTICIPANT'S SHARES HELD UNDER THE PLAN. EACH PARTICIPANT
MUST MAKE HIS OR HER OWN DECISION WHETHER TO INSTRUCT THE AGENT TO TENDER ANY
SUCH SHARES AND, IF SO, HOW MANY SHARES TO TENDER. L.T. HOLDING CORP., A WHOLLY
OWNED SUBSIDIARY OF LOEWS CORPORATION, HAS ADVISED THE COMPANY OF ITS INTENTION
TO TENDER NO FEWER THAN 2 MILLION OF THE APPROXIMATELY 3.03 MILLION SHARES OWNED
BY IT, AND THAT IT MAY TENDER ALL OF THE SHARES OWNED BY IT.
Please note that, under certain circumstances set forth in the Offer to
Purchase, the Company may terminate or amend the offer or may not be required to
accept for payment any of the Shares tendered or may accept for payment, pro
rata with Shares tendered by other shareholders, fewer than all the Shares
tendered by any shareholder.
The enclosed instruction form may be delivered to First Chicago Trust
Company of New York either by hand or overnight delivery to First Chicago Trust
Company of New York, Tenders & Exchanges, Suite 4680, 14 Wall Street, 8th Floor,
New York, NY 10005, or by mail to First Chicago Trust Company of New York,
Tenders & Exchanges, Suite 4660, P.O. Box 2560, Jersey City, NJ 07303-2560.
Very truly yours,
First Chicago Trust Company of New
York,
as Agent under the CBS Inc.
Dividend Reinvestment Plan
2
<PAGE> 7
INSTRUCTIONS WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
3,500,000 SHARES OF COMMON STOCK
OF
[LOGO]
The undersigned acknowledge(s) receipt of the Offer to Purchase dated July
25, 1994, in connection with the offer by CBS Inc. (the "Company") to purchase
3,500,000 shares of its Common Stock, par value $2.50 per share (such shares
together with all other outstanding shares of Common Stock of the Company are
herein referred to as the "Shares"), at a price of $325 per Share, net to the
seller in cash.
This will instruct First Chicago Trust Company of New York, as Agent under
the CBS Inc. Dividend Reinvestment Plan (the "Agent"), to tender Shares credited
to the account of the undersigned under the CBS Inc. Dividend Reinvestment Plan,
upon the terms and subject to the conditions set forth in the Offer to Purchase.
Number of Shares to be tendered by the Agent: _____________________________ *
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* Unless otherwise indicated, it will be assumed that all Shares held for the
account of the undersigned are to be tendered.
ODD LOTS
/ / By checking this box, the undersigned represent(s) that the undersigned
beneficially owned as of the close of business on July 8, 1994, and will
continue to beneficially own until the expiration of the offer, an aggregate
of 25 or fewer Shares (excluding Shares held in the Company's Employee
Investment Fund) and is tendering all such Shares.
SIGN HERE
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SIGNATURE(S)
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PLEASE PRINT NAME(S) AND ADDRESS(ES)
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PLEASE PRINT SOCIAL SECURITY NUMBER(S)
Dated _________________________________________________________________________
3
<PAGE> 1
NOTICE TO HOLDERS OF
$10 CONVERTIBLE SERIES B
PREFERENCE STOCK OF CBS INC.
OFFER BY
[LOGO]
TO PURCHASE FOR CASH
3,500,000 SHARES OF ITS COMMON STOCK
July 25, 1994
CBS Inc., a New York corporation (the "Company"), is making an offer to
purchase 3,500,000 shares of its Common Stock, par value $2.50 per share (such
shares together with all other outstanding shares of Common Stock of the Company
are herein referred to as the "Shares"), at a price of $325 per Share, upon the
terms and subject to the conditions set forth in the Company's Offer to Purchase
dated July 25, 1994 (the "Offer to Purchase") and the related Letter of
Transmittal (which together constitute the "Offer").
For your information, we are enclosing the Offer to Purchase and the Letter
of Transmittal.
The Company is not offering to purchase any of the shares of $10
Convertible Series B Preference Stock (the "Convertible Securities"). Holders of
Convertible Securities who wish to participate in the Offer must first convert
such Convertible Securities in accordance with the terms and provisions thereof.
To the extent the Convertible Securities are converted into Shares, but the
resulting Shares are not purchased pursuant to the Offer (whether because the
Offer is terminated or withdrawn, or by reason of proration or otherwise),
holders of Convertible Securities so converted will have lost all preferential
rights of Convertible Securities as compared to Shares and all rights to
dividends in respect of the Convertible Securities, including, without
limitation, the next scheduled dividend thereon (which has a record date of
September 15, 1994). NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY HOLDER OF CONVERTIBLE SECURITIES AS TO WHETHER TO CONVERT
ANY OR ALL SUCH CONVERTIBLE SECURITIES OR AS TO WHETHER TO TENDER ANY OR ALL
SHARES ISSUABLE UPON SUCH CONVERSION.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 8:00 P.M., NEW
YORK CITY TIME, ON MONDAY, AUGUST 22, 1994, UNLESS THE OFFER IS EXTENDED.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent and Dealer Manager at the addresses and telephone numbers set
forth on the back cover of the Offer to Purchase.
Very truly yours,
CBS Inc.
<PAGE> 1
July 13, 1994
CBS INC. WILL NOT PURSUE QVC INC.
CBS ANNOUNCES SELF-TENDER FOR 3.5 MILLION SHARES
AT $325 PER SHARE AND WILL SPLIT ITS COMMON STOCK 5 FOR 1
CBS Inc. announced today that it will not pursue its
acquisition of QVC Inc. in light of the offer for QVC made by Comcast
Corporation. CBS announced that it will commence a cash tender offer for up to
3.5 million common shares at a price of $325 per share, or approximately $1.1
billion in the aggregate. CBS expects to commence the Offer by July 25 and to
close this Offer on or about August 22.
CBS also announced that immediately following the Offer it
intends to effect a 5 for 1 share split, paying a stock dividend of four new
shares on each outstanding common share. The Company also intends to continue
its regular cash dividend of $2 per common share annually, or 40 cents per
share on the split shares.
Laurence A. Tisch, Chairman, President and Chief Executive
Officer of CBS, commenced that, "While we believe the QVC merger represented an
opportunity, we have every confidence that CBS will remain aggressive,
future-oriented and highly competitive. We have demonstrated our appetite for
new directions and will continue to pursue new business opportunities as
appropriate."
Loews Corporation has advised CBS of its intention to tender
all the shares of CBS held by it. Loews owns approximately 3 million shares of
CBS Common Stock.
The Offer is not conditioned upon any minimum number of shares
being tendered. If more than 3.5 million shares are properly tendered and not
withdrawn, shares tendered will be subject to proration. The Offer, proration
period and withdrawal right will expire at 5:00 p.m., EDT, on or about August
22, unless the Offer is extended. The exact expiration date will be announced
when the Offer is commenced. Salomon Brothers Inc is acting as financial
advisor to the Company in connection with the Offer.
Contact: Ann Morfogen
Media Relations
(212) 975-8088
<PAGE> 2
2
Keith Fawcett
Investor Relations
(212) 975-6824
<PAGE> 1
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN
OFFER TO SELL SHARES. THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE
DATED JULY 25, 1994, AND THE RELATED LETTER OF TRANSMITTAL AND IS NOT
BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF)
HOLDERS OF SHARES RESIDING IN ANY JURISDICTION IN WHICH THE
MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE
IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. IN
ANY JURISDICTION THE SECURITIES LAWS OF WHICH REQUIRE
THE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER,
THE OFFER SHALL BE DEEMED MADE ON BEHALF OF THE
COMPANY BY ONE OR MORE BROKERS OR DEALERS
LICENSED UNDER THE LAWS OF SUCH
JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
BY
(LOGO) CBS INC.
3,500,000 SHARES OF ITS COMMON STOCK
AT
$325 NET PER SHARE
CBS Inc., a New York corporation (the "Company"), is offering to
purchase 3,500,000 shares of its Common Stock, par value $2.50 per share (the
"Shares"), at $325 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated July 25,
1994 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer").
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THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00
P.M., NEW YORK CITY TIME, ON MONDAY, AUGUST 22, 1994, UNLESS THE OFFER IS
EXTENDED.
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NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
AS TO WHETHER ANY SHAREHOLDER SHOULD TENDER ANY OR ALL OF SUCH SHAREHOLDER'S
SHARES PURSUANT TO THE OFFER. EACH SHAREHOLDER MUST MAKE ITS OWN DECISION
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. L.T. HOLDING
CORP., A WHOLLY OWNED SUBSIDIARY OF LOEWS CORPORATION ("HOLDING"), HAS ADVISED
THE COMPANY OF ITS INTENTION TO TENDER NO FEWER THAN 2 MILLION OF THE
APPROXIMATELY 3.03 MILLION SHARES OWNED BY IT, AND THAT IT MAY TENDER ALL OF
THE SHARES OWNED BY IT.
Holding has further advised the Company that its determination of the
number of Shares it will tender will be based upon Holding's intention to
achieve certain tax treatment of the Offer. If Holding tenders less than all
of its Shares, Holding's ownership interest in the Company may increase by a
small percentage.
The Company believes that the purchase of its Shares at this time
represents the best use of a substantial portion of the cash and marketable
securities it has available and is an attractive investment opportunity. The
Offer will afford to shareholders the opportunity to dispose of Shares without
the usual transaction costs associated with a market sale. The Offer will also
allow qualifying shareholders owning beneficially 25 or fewer Shares (excluding
Shares held in the Company's Employee Investment Fund or CBS News Special
Projects Inc. Employee Investment Fund (collectively, the "Plan")) whose Shares
are purchased pursuant to the Offer to avoid the payment of brokerage
commissions and any applicable odd-lot discount payable on a sale of Shares in
a transaction effected on a securities exchange. See "Background and Purpose
of the Offer" in, and Section 8 of, the Offer to Purchase.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS,
INCLUDING THE CONDITION THAT HOLDING TENDER, AND NOT WITHDRAW, AT LEAST 1
MILLION OF ITS SHARES. SEE SECTION 6 OF THE OFFER TO PURCHASE.
Upon the terms and subject to the conditions of the Offer, the Company
will accept for payment (and thereby purchase) 3,500,000 Shares or such lesser
number of Shares as are properly tendered (and not withdrawn) on or before 8:00
p.m., New York City time, on Monday, August 22, 1994, or the latest time and
date at which the Offer, if extended by the Company, shall expire (the
"Expiration Date"). The Company expressly reserves the right, in its sole
discretion, at any time or from time to time, to extend the period of time
during which the Offer is open by giving oral or written notice of such
extension to First Chicago Trust Company of New York (the "Depositary") and
making a public announcement thereof. See Sections 1, 3, 5 and 14 of the Offer
to Purchase.
If the number of Shares properly tendered and not withdrawn prior to
the Expiration Date is greater than 3,500,000 Shares (or such greater number of
Shares as the Company may elect to purchase pursuant to the Offer), the
Company, upon the terms and subject to the conditions of the Offer, will accept
Shares for purchase in the following order of priority: (a) first, all Shares
properly tendered and not withdrawn prior to the Expiration Date by any
shareholder who beneficially owned on July 8, 1994, and continues to
beneficially own until the Expiration Date, an aggregate of 25 or fewer Shares
(excluding Shares held in the Plan) and who: (1) tenders all Shares
beneficially owned by such shareholder (excluding Shares held in the Plan)
(partial tenders will not qualify for this preference); and (2) completes the
box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on
the Notice of Guaranteed Delivery; and (b) then, after purchase of all the
foregoing Shares, all other Shares properly tendered and not withdrawn prior to
the Expiration Date on a pro rata basis, if necessary (with adjustments to
avoid purchases of fractional Shares).
Except as otherwise provided in Section 4 of the Offer to Purchase, a
tender of Shares pursuant to the Offer is irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time before the Expiration Date
and, unless theretofore accepted for payment by the Company, may also be
withdrawn after 12:00 Midnight, New York City time, on Tuesday, September 20,
1994. See Section 4 of the Offer to Purchase.
For a withdrawal to be effective, the Depositary must timely receive
(at one of its addresses set forth on the back cover of the Offer to Purchase)
a written, telegraphic or facsimile transmission notice of withdrawal. Such
notice of withdrawal must specify the name of the person having tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered owner, if different from that of the person who tendered such
Shares. If the certificates have been delivered or otherwise identified to the
Depositary, then, prior to the release of such certificates, the tendering
shareholder must also submit the serial numbers shown on the particular
certificates evidencing the Shares and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution (as defined in Section
3 of the Offer to Purchase) (except in the case of Shares tendered by an
Eligible Institution). If Shares have been delivered pursuant to the procedure
for book-entry transfer set forth in Section 3 of the Offer to Purchase, the
notice of withdrawal must specify the name and number of the account at the
applicable Book-Entry Transfer Facility (as defined in Section 3 of the Offer
to Purchase) to be credited with the withdrawn Shares and otherwise comply with
the procedures of such facility. A withdrawal of a tender of Shares may not be
rescinded, and any Shares properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. Withdrawn Shares may, however, be
retendered before the Expiration Date by again following any of the procedures
described in Section 3 of the Offer to Purchase.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER. These documents are being mailed to record holders of Shares and will
be furnished to brokers, dealers, banks and similar persons whose names, or the
names of whose nominees, appear on the Company's shareholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 13e-4(d)(1) of the
General Rules and Regulations under the Securities Exchange Act of 1934 is
contained in the Offer to Purchase and is incorporated herein by reference.
Any questions or requests for assistance may be directed to the
Information Agent and the Dealer Manager at the addresses and telephone numbers
set forth below. Requests for additional copies of the Offer to Purchase,
Letter of Transmittal or other tender offer materials may be directed to the
Information Agent and the Dealer Manager and such copies will be furnished at
the Company's expense. Shareholders may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue, 9th Floor
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL FREE (800) 322-2885
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-1928 (call collect)
July 25, 1994
<PAGE> 1
July 25, 1994
CBS COMMENCES OFFER TO PURCHASE FOR CASH
3,500,000 SHARES OF ITS COMMON STOCK
AT $325 NET PER SHARE
CBS Inc. commenced today an offer to purchase up to 3,500,000 shares of its
Common Stock at $325 per share, net to the seller in cash, upon the terms and
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal, which together constitute the "Offer." This represents an
aggregate consideration of up to $1,137.5 million in cash for the repurchase of
CBS common shares. If the Offer is oversubscribed, shares tendered prior to
the expiration date will be subject to proration. The Offer, the proration
period and withdrawal rights will expire at 8:00 P.M., New York City time, on
Monday, August 22, 1994, unless the Offer is extended.
L.T. Holding Corp., a wholly owned subsidiary of Loews
Corporation, has updated its previously expressed intention and now advises CBS
that it intends to tender no fewer than 2 million of the approximately 3.03
million shares of the CBS Common Stock held by it, and that it may tender all
of the shares owned by it. L.T. Holding Corp. has further advised the Company
that its determination of the number of shares it will tender will be based
upon its intention to achieve certain tax treatment of the Offer. If L.T.
Holding Corp. tenders less than all of its shares, the ownership interest of
L.T. Holding Corp. in CBS may increase by a small percentage.
The Offer is not conditioned upon any minimum number of shares
being tendered. The Offer is, however, subject to certain conditions,
including that L.T. Holding tenders, and not withdraw, at least 1 million
shares of CBS Common Stock under its control. Odd lot owners, who beneficially
owned 25 or fewer shares on the record date of July 8, 1994, and who continue
to beneficially own these shares until the expiration date, will not be subject
to proration.
At quarter-end June 1994, the Company's cash and marketable
securities totaled approximately $1.3 billion, while total debt was
approximately $0.6 billion. The Company has total common shares outstanding of
approximately 15.6 million.
<PAGE> 2
2
Questions and requests for assistance, or for copies of the
Offer to Purchase, may be directed to Mackenzie Partners, Inc., the Information
Agent for the Offer, by calling (800) 322-2885. The Depositary for the Offer
is First Chicago Trust Company of New York. The Dealer Manager for the Offer
is Salomon Brothers Inc.
Contacts: Ann Morfogen, (212) 975-8088, Media Relations
Keith Fawcett, (212) 975-6824, Investor Relations
