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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
(Amendment No. 1)
Solicitation/Recommendation Statement Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
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SPELLING ENTERTAINMENT GROUP INC.
(Name of Subject Company)
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SPELLING ENTERTAINMENT GROUP INC.
(Name of Person(s) Filing Statement)
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Common Stock, Par Value $0.001 Per Share
(Title of Class of Securities)
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847807104
(CUSIP Number of Class of Securities)
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Sally Suchil, Esq.
Senior Vice President -
General Counsel, Secretary and Administration
5700 Wilshire Boulevard
Los Angeles, California
(323) 965-5700
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of Bidders)
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With Copies to:
Robert B. Pincus, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
Wilmington, Delaware 19801
(302) 651-3000
June 14, 1999
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This Amendment No. 1 to the Solicitation/Recommendation Statement on
Schedule 14D-9 (this "Amendment") relates to the offer by VSEG Acquisition Inc.,
a Delaware corporation ("Purchaser") and a wholly owned subsidiary of Viacom
International Inc., a Delaware corporation ("Parent"), to purchase all
outstanding shares (the "Shares") of common stock, par value $0.001 per share
(the "Common Stock"), of Spelling Entertainment Group Inc., a Delaware
corporation (the "Company"), at a price of $9.75 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in Purchaser's
Offer to Purchase dated May 21, 1999 (the "Offer to Purchase") and in the
related Letter of Transmittal (which together constitute the "Offer").
Item 4. The Solicitation or Recommendation
(a) Item 4(a) is hereby amended by amending and restating in its entirety
the first paragraph under "The Solicitation or Recommendation -- Recommendation
of the Company Board":
The Board, by unanimous vote of all directors present and voting,
based upon, among other things, the unanimous recommendation and approval
of the Special Committee, has determined that the Merger Agreement and the
transactions contemplated thereby, including each of the Offer and the
Merger (collectively, the "Transactions"), are fair to, and in the best
interests of, the Company and the Public Stockholders, approved the Merger
Agreement, the Offer and the Merger, declared the Merger Agreement to be
advisable and resolved to recommend that stockholders accept the Offer and
tender their Shares pursuant to the Offer.
(b) Item 4(b) is hereby amended by amending and restating the second
paragraph under "The Solicitation or Recommendation -- Recommendation of the
Company's Board; Fairness of the Offer and the Merger" in the Schedule 14D-9 as
follows:
Fairness of the Merger. In reaching its determinations, the Special
Committee considered the following factors, each of which, except as
discussed below, the Special Committee believed supported its conclusion
regarding the fairness of the Transactions:
o the historical market prices of the Shares, including the fact
that the $9.75 per Share represented a premium of
approximately 44.4% over the $6.75 per Share closing price on
March 18, 1999, the last full trading day prior to the March
19, 1999 announcement of the Proposal, and represented a
premium of approximately 52.9% over the closing price for the
Shares on the NYSE on the date 30 days prior to the
announcement of the Proposal;
o the fact that the $9.75 per Share to be paid to the Public
Stockholders in the Offer and the Merger exceeded the highest
price at which the Shares have traded on the NYSE since May 3,
1996;
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o the fact that the $9.75 per Share to be paid to Public
Stockholders in the Offer and the Merger represented a 228%
premium over the net book value per Share of $2.97 as of March
30, 1999;
o the opinion of Lazard Freres that, based upon and subject to
the assumptions and qualifications stated in its opinion, the
$9.75 per Share to be paid to the Public Stockholders in the
Offer and the Merger is fair to the Public Stockholders from a
financial point of view, and the report and analysis presented
to the Special Committee in connection with the Lazard Freres
opinion (see "SPECIAL FACTORS -- Opinion of Lazard");
o the analysis conducted by Lazard Freres in support of its
opinion that the $9.75 per Share to be paid to the Public
Stockholders in the Offer and the Merger is fair to the Public
Stockholders from a financial point of view, was concurred
with and adopted by the Special Committee; although the
Special Committee recognized that some of the individual
analyses conducted by Lazard Freres did not necessarily
support its conclusion regarding the fairness of the
Transactions, the Special Committee concluded that the Lazard
Freres analysis, when taken as a whole, supported the Special
Committee's conclusion that the Merger is fair to and in the
best interests of the Public Stockholders;
o that the terms of the Merger Agreement were determined through
arm's-length negotiations between the Special Committee and
its legal and financial advisors, on one hand, and
representatives of Viacom, on the other, and provide for the
Offer in order to allow Public Stockholders to receive payment
for their Shares on an accelerated basis;
o that Viacom has sufficient stock ownership to control a
disposition of the Company and informed the Special Committee
that it would not be interested in a third-party sale of the
Company; the Special Committee and Lazard were not authorized
to, and did not, solicit third-party indications of interest
for the acquisition of the Company, nor were any offers from
third parties received; although the Special Committee
recognized that this factor did not necessarily support its
determination regarding the fairness of the Transactions, the
Special Committee concluded that this factor was outweighed by
the totality of the other factors it considered in arriving at
its determination;
o the ability of the Public Stockholders who object to the
Merger to obtain "fair value" for their Shares if they
exercise and perfect their appraisal rights under the DGCL;
o the results of the prior efforts by Viacom to sell the
Company; and
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o the fact that the Offer provides the Public Stockholders with
liquidity to dispose of their Shares which may not be
available in the public market due to the low level of trading
volume of the Shares on the New York Stock Exchange ("NYSE")
prior to the announcement of the Proposal (an average daily
trading volume of 22,834 shares since December 31, 1998).
(c) Item 4(b) is hereby amended by amending and restating in its entirety
the fourth paragraph under "The Solicitation or Recommendation -- Recommendation
of the Company's Board; Fairness of the Offer and the Merger" in the Offer to
Purchase as follows:
On May 14, 1999, the Board, by the unanimous vote of all directors
present and voting based upon, among other things, the unanimous
recommendation and approval of the Special Committee, determined that the
Merger Agreement and the Transactions are fair to, and in the best
interests of, the Company and the Public Stockholders, approved the Merger
Agreement, the Offer and the Merger, declared the Merger Agreement to be
advisable and recommended that stockholders accept the Offer and tender
their Shares pursuant to the Offer.
(d) Item 4(b) is hereby amended by adding the following paragraph
immediately succeeding the final paragraph under "The Solicitation or
Recommendation -- Recommendation of the Company's Board; Fairness of the Offer
and the Merger":
The Board of Directors recognized that the Transactions were not
structured to require the approval of a majority of the Shares held by the
Public Stockholders and that Viacom currently has sufficient voting power
to approve the Merger Agreement without the affirmative vote of any other
stockholder of the Company. However, the Board of Directors, including the
members of the Special Committee, believe that the Transactions are
procedurally fair because, among other things:
o the Special Committee was appointed to represent the interests
of the Public Stockholders;
o the Special Committee retained and was advised by separate
legal counsel;
o the Special Committee retained Lazard Freres as its
independent financial advisor to assist it in evaluating and
negotiating a potential transaction with Viacom;
o the Special Committee engaged in deliberations to evaluate the
Transactions and alternatives thereto;
o the $9.75 per Share price and the other terms and conditions
of the Transaction resulted from active arm's-length
bargaining between
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representatives of the Special Committee, on the one hand, and
representatives of Viacom, on the other; and
o Public Stockholders may obtain "fair value" for their Shares
if they exercise and perfect their appraisal rights under the
DGCL.
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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.
June 14, 1999
SPELLING ENTERTAINMENT GROUP INC.
By: /s/ Sumner M. Redstone
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Name: Sumner M. Redstone
Title: Chairman of the Board
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