____________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
SCHEDULE 14D-1
(Tender Offer Statement Pursuant to
Section 14(d)(1) of the Securities Exchange Act of 1934)
(Amendment No. 27)
PARAMOUNT COMMUNICATIONS INC.
(Name of Subject Company)
QVC NETWORK, INC.
COMCAST CORPORATION
BELLSOUTH CORPORATION
(Bidders)
Common Stock, Par Value $1.00 Per Share
(Including the Associated Common Stock Purchase Rights)
(Title of Class of Securities)
699216 10 7
(CUSIP Number of Class of Securities)
<TABLE>
<S> <C> <C>
Neal S. Grabell Stanley L. Wang Walter H. Alford
QVC Network, Inc. Comcast Corporation BellSouth Corporation
Goshen Corporate Park 1234 Market Street 1155 Peachtree Street, N.E.
West Chester, PA 19380 Philadelphia, PA 19107 Atlanta, GA 30367
(215) 430-1000 (215) 981-7510 (404) 249-2050
</TABLE>
(Names, Addresses and Telephone Numbers of Persons Authorized
to Receive Notices and Communications on Behalf of Bidders)
Copy to:
<TABLE>
<S> <C> <C>
Pamela S. Seymon Dennis S. Hersch Alan Stephenson
Wachtell, Lipton, Rosen & Katz Davis Polk & Wardwell Cravath, Swaine & Moore
51 West 52nd Street 450 Lexington Avenue One Worldwide Plaza
New York, NY 10019 New York, NY 10017 825 Eighth Avenue
(212) 403-1000 (212) 450-4000 New York, NY 10022
(212) 474-1000
</TABLE>
<PAGE>
<PAGE>
This Statement amends and supplements the Tender Of-
fer Statement on Schedule 14D-1 filed with the Securities and
Exchange Commission (the "Commission") on October 27, 1993, as
previously amended and supplemented (the "Schedule 14D-1"), by
QVC Network, Inc., a Delaware corporation ("QVC"), Comcast Cor-
poration, a Pennsylvania corporation, and BellSouth Corpora-
tion, a Georgia corporation, and relates to a tender offer to
purchase 61,607,894 of the outstanding shares of Common Stock,
par value $1.00 per share (the "Shares"), of Paramount Com-
munications Inc., a Delaware corporation ("Paramount"), or such
greater number of Shares as equals 50.1% of the Shares out-
standing plus the Shares issuable upon the exercise of the then
exercisable stock options, as of the expiration of the Offer,
and the associated Rights, at a price of $92.00 per Share (and
associated Right), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated October 27, 1993 (the "Offer to
Purchase"), as amended and supplemented by the Supplement
thereto, dated November 12, 1993 (the "First Supplement"), the
Second Supplement thereto, dated December 23, 1993 (the "Second
Supplement"), and the related Letters of Transmittal, which
were annexed to and filed with the Schedule 14D-1 as Exhibits
(a)(1), (a)(17), (a)(46), (a)(2), (a)(18) and (a)(47), respec-
tively, and the amendments thereto (which together constitute
the "Offer"). Capitalized terms used and not defined herein
shall have the meanings assigned such terms in the Offer and
the Schedule 14D-1.
Item 3. Past Contacts, Transactions or Negotiations With the
Subject Company.
On January 11, 1994, QVC's legal advisor sent a
letter to the Paramount Board of Directors stating QVC's view
that the Viacom-Blockbuster Offer violates the terms of the
bidding procedures established by Paramount and agreed to by
QVC and Viacom and requesting that the Paramount Board take
appropriate action, consistent with its agreements with QVC and
Viacom, to enforce the bidding procedures. The text of the
letter is attached hereto as Exhibit (a)(56), and the foregoing
summary description is qualified in its entirety by reference
to such exhibit.
<PAGE>
<PAGE>
Item 11. Material to be Filed as Exhibits.
(a)(1) -- Offer to Purchase, dated October 27, 1993.*
(a)(2) -- Letter of Transmittal.*
(a)(3) -- Notice of Guaranteed Delivery.*
(a)(4) -- Form of Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.*
(a)(5) -- Form of Letter to Clients for Use by Brokers,
Dealers, Commercial Banks, Trust Companies and
Nominees.*
(a)(6) -- Guidelines of the Internal Revenue Service for
Certification of Taxpayer Identification Number
on Substitute Form W-9.*
(a)(7) -- Press release issued by QVC on October 21,
1993.*
(a)(8) -- Form of Summary Advertisement, dated October 27,
1993.*
(a)(9) -- Text of Letter from QVC to Paramount, dated Oc-
tober 29, 1993.*
(a)(10) -- Press release issued by QVC on October 29,
1993.*
(a)(11) -- Form of Letter to Participants in the Dividend
Reinvestment Plan of Paramount Communications
Inc.*
(a)(12) -- Text of Letter from Paramount to QVC, dated Oc-
tober 29, 1993.*
(a)(13) -- Text of Letter from Paramount to QVC advisor,
dated November 1, 1993.*
(a)(14) -- Text of Letter from QVC advisor to Paramount,
dated November 2, 1993.*
_____________________
* Previously filed.
-2-
<PAGE>
<PAGE>
(a)(15) -- Press release issued by QVC on November 5,
1993.*
(a)(16) -- Press release issued by QVC on November 5,
1993.*
(a)(17) -- Supplement to the Offer to Purchase, dated No-
vember 12, 1993.*
(a)(18) -- Revised Letter of Transmittal.*
(a)(19) -- Revised Notice of Guaranteed Delivery.*
(a)(20) -- Revised Form of Letter to Brokers, Dealers, Com-
mercial Banks, Trust Companies and Nominees.*
(a)(21) -- Revised Form of Letter to Clients for use by
Brokers, Dealers, Commercial Banks, Trust Compa-
nies and Nominees.*
(a)(22) -- Press release issued by QVC on November 11,
1993.*
(a)(23) -- Press release issued by QVC on November 12,
1993.*
(a)(24) -- Revised Form of Letter to Participants in the
Dividend Reinvestment Plan of Paramount Com-
munications, Inc.*
(a)(25) -- Press release issued by QVC on November 16,
1993.*
(a)(26) -- Amended Complaint in Viacom International Inc.
v. Tele-Communications, Inc., et al., dated No-
vember 9, 1993, and filed in the United States
District Court for the Southern District of New
York.*
(a)(27) -- Text of letter from QVC to Paramount, dated
November 19, 1993.*
(a)(28) -- Press release issued by QVC on November 20,
1993.*
(a)(29) -- Press release issued by QVC on November 22,
1993.*
_____________________
* Previously filed.
-3-
<PAGE>
<PAGE>
(a)(30) -- Press release issued by QVC on November 23,
1993.*
(a)(31) -- Press release issued by QVC on November 23,
1993.*
(a)(32) -- Press release issued by QVC on November 24,
1993.*
(a)(33) -- Press release issued by QVC on December 1,
1993.*
(a)(34) -- Press release issued by QVC on December 9,
1993.*
(a)(35) -- Press release issued by QVC on December 10,
1993.*
(a)(36) -- Press release issued by QVC on December 14,
1993.*
(a)(37) -- Text of letter from Paramount advisor to QVC,
dated December 14, 1993.*
(a)(38) -- Text of letter from QVC advisor to Paramount
advisor, dated December 14, 1993.*
(a)(39) -- Press release issued by QVC on December 15,
1993.*
(a)(40) -- Press release issued by QVC on December 16,
1993.*
(a)(41) -- Text of letter from Paramount advisor to QVC
advisor, dated December 17, 1993.
(a)(42) -- Text of letter from QVC advisor to Viacom advi-
sor, dated December 17, 1993.*
(a)(43) -- Text of letter from QVC to Paramount, dated De-
cember 20, 1993.*
(a)(44) -- Press release issued by QVC on December 20,
1993.*
_____________________
* Previously filed.
-4-
<PAGE>
<PAGE>
(a)(45) -- Press release issued by QVC on December 20,
1993.*
(a)(46) -- Second Supplement to the Offer to Purchase,
dated December 23, 1993.*
(a)(47) -- Second Revised Letter of Transmittal.*
(a)(48) -- Second Revised Notice of Guaranteed Delivery.*
(a)(49) -- Second Revised Form of Letter to Brokers, Deal-
ers, Commercial Banks, Trust Companies and Nomi-
nees.*
(a)(50) -- Second Revised Form of Letter to Clients for use
by Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(51) -- Second Revised Form of Letter to Participants in
the Dividend Reinvestment Plan of Paramount Com-
munications Inc.*
(a)(52) -- Press release issued by QVC on December 22,
1993.*
(a)(53) -- Press release issued by QVC on December 27,
1993.*
(a)(54) -- Press release issued by QVC on January 7, 1994.*
(a)(55) -- Press release issued by QVC on January 10,
1994.*
(a)(56) -- Text of letter from QVC advisor to Paramount,
dated January 11, 1994.
(b)(1) -- Commitment Letters, dated September 30, 1993, by
and between QVC and certain banks.*
(b)(2) -- Commitment Letters, dated November 19, 1993, by
and between QVC and certain banks.*
(b)(3) -- Bank Credit Agreement, dated as of January 7,
1994, by and between QVC and certain banks.*
_____________________
* Previously filed.
-5-
<PAGE>
<PAGE>
(c)(1) -- Commitment Letter, dated October 15, 1993, by
and among QVC and certain investors named there-
in.*
(c)(2) -- Stockholders Agreement, dated July 16, 1993,
among Liberty Media Corporation, Comcast Cor-
poration, Arrow Investments, L.P. and certain
affiliates and subsidiaries of such parties.*
(c)(3) -- Agreement Among Stockholders, dated October 15,
1993.*
(c)(4) -- Proposed form of merger agreement delivered by
QVC to Paramount.*
(c)(5) -- First Amended and Supplemental Complaint in QVC
Network, Inc. v. Paramount Communications Inc.
filed October 28, 1993 in the Delaware Chancery
Court.*
(c)(6) -- Voting Trust Agreement, dated as of October 28,
1993, between QVC and G. William Miller.*
(c)(7) -- Informational request from QVC to Paramount,
dated November 1, 1993.*
(c)(8) -- Fair bidding procedures delivered by QVC to Par-
amount on November 1, 1993.*
(c)(9) -- Proposed form of merger agreement delivered by
QVC to Paramount on November 1, 1993.*
(c)(10) -- Commitment Letter, dated November 11, 1993, by
and among QVC and certain investors named there-
in.*
(c)(11) -- Memorandum of Understanding, dated November 11,
1993, by and between QVC and BellSouth.*
(c)(12) -- Liberty-QVC Agreement, dated November 11, 1993,
by and between QVC and Liberty.*
(c)(13) -- Agreement Among Stockholders, dated November 11,
1993, among QVC, Advance, Arrow, BellSouth, Com-
cast and Cox.*
_____________________
* Previously filed.
-6-
<PAGE>
<PAGE>
(c)(14) -- Understanding Among Stockholders, dated November
11, 1993, among Arrow, BellSouth, Comcast and
Liberty.*
(c)(15) -- Agreement Containing Consent Order and Interim
Agreement, dated November 12, 1993, among the
FTC, Liberty, and TCI.*
(c)(16) -- BellSouth Commitment Letter, dated November 19,
1993, by and between BellSouth and QVC.*
(c)(17) -- Memorandum Opinion and Preliminary Injunction
Order in QVC Network, Inc. v. Paramount Com-
munications, Inc., C.A. No. 13208, both dated
November 24, 1993, entered by Delaware Chancery
Court.*
(c)(18) -- Revised Memorandum Opinion, dated November 26,
1993, in QVC Network, Inc. v. Paramount Communi-
cations, Inc., C.A. No. 13208, entered by Dela-
ware Chancery Court.*
(c)(19) -- Order, dated December 9, 1993, in Paramount Com-
munications Inc. v. QVC Network, Inc., C.A. No.
13208, entered by Delaware Supreme Court.*
(c)(20) -- Proposed form of merger agreement delivered by
Paramount to QVC on December 14, 1993.*
(c)(21) -- Text of letter from QVC advisor to Paramount
advisor, dated December 10, 1993.*
(c)(22) -- Text of letter from Paramount advisor to QVC
advisor, dated December 14, 1993.*
(c)(23) -- Agreement and Plan of Merger, between Paramount
and QVC, dated as of December 22, 1993.*
(c)(24) -- Exemption Agreement, between Paramount and QVC,
dated December 22, 1993.*
(c)(25) -- Voting Agreement, dated December 22, 1993, among
BellSouth, Comcast, Cox, Advance and Arrow.*
_____________________
* Previously filed.
-7-
<PAGE>
<PAGE>
(c)(26) -- First Amendment, dated as of December 27, 1993,
to Agreement and Plan of Merger, between Para-
mount and QVC.*
(c)(27) -- Letter Agreement, dated as of December 20, 1993,
by and among QVC, Comcast, Cox, Advance and
BellSouth.*
_____________________
* Previously filed.
-8-
<PAGE>
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this state-
ment is true, complete and correct.
QVC NETWORK, INC.
By:/s/ Neal S. Grabell
Neal S. Grabell
Senior Vice President,
General Counsel and
Corporate Secretary
Dated: January 12, 1994
<PAGE>
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this state-
ment is true, complete and correct.
COMCAST CORPORATION
By:/s/ Julian A. Brodsky
Julian A. Brodsky
Vice Chairman
Dated: January 12, 1994
<PAGE>
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this state-
ment is true, complete and correct.
BELLSOUTH CORPORATION
By:/s/ Charles C. Miller, III
Charles C. Miller, III
Vice President-
Strategic Planning and Corporate
Development
Dated: January 12, 1994
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
(a)(1) -- Offer to Purchase, dated October 27, 1993.*
(a)(2) -- Letter of Transmittal.*
(a)(3) -- Notice of Guaranteed Delivery.*
(a)(4) -- Form of Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.*
(a)(5) -- Form of Letter to Clients for Use by Brokers,
Dealers, Commercial Banks, Trust Companies and
Nominees.*
(a)(6) -- Guidelines of the Internal Revenue Service for
Certification of Taxpayer Identification Number
on Substitute Form W-9.*
(a)(7) -- Press release issued by QVC on October 21,
1993.*
(a)(8) -- Form of Summary Advertisement, dated October 27,
1993.*
(a)(9) -- Text of Letter from QVC to Paramount, dated Oc-
tober 29, 1993.*
(a)(10) -- Press release issued by QVC on October 29,
1993.*
(a)(11) -- Form of Letter to Participants in the Dividend
Reinvestment Plan of Paramount Communications
Inc.*
(a)(12) -- Text of Letter from Paramount to QVC, dated Oc-
tober 29, 1993.*
(a)(13) -- Text of Letter from Paramount to QVC advisor,
dated November 1, 1993.*
(a)(14) -- Text of Letter from QVC advisor to Paramount,
dated November 2, 1993.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(a)(15) -- Press release issued by QVC on November 5,
1993.*
(a)(16) -- Press release issued by QVC on November 5,
1993.*
(a)(17) -- Supplement to the Offer to Purchase, dated No-
vember 12, 1993.*
(a)(18) -- Revised Letter of Transmittal.*
(a)(19) -- Revised Notice of Guaranteed Delivery.*
(a)(20) -- Revised Form of Letter to Brokers, Dealers, Com-
mercial Banks, Trust Companies and Nominees.*
(a)(21) -- Revised Form of Letter to Clients for use by
Brokers, Dealers, Commercial Banks, Trust Compa-
nies and Nominees.*
(a)(22) -- Press release issued by QVC on November 11,
1993.*
(a)(23) -- Press release issued by QVC on November 12,
1993.*
(a)(24) -- Revised Form of Letter to Participants in the
Dividend Reinvestment Plan of Paramount Com-
munications, Inc.*
(a)(25) -- Press release issued by QVC on November 16,
1993.*
(a)(26) -- Amended Complaint in Viacom International Inc.
v. Tele-Communications, Inc., et al., dated No-
vember 9, 1993, and filed in the United States
District Court for the Southern District of New
York.*
(a)(27) -- Text of letter from QVC to Paramount, dated
November 19, 1993.*
(a)(28) -- Press release issued by QVC on November 20,
1993.*
(a)(29) -- Press release issued by QVC on November 22,
1993.*
(a)(30) -- Press release issued by QVC on November 23,
1993.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(a)(31) -- Press release issued by QVC on November 23,
1993.*
(a)(32) -- Press release issued by QVC on November 24,
1993.*
(a)(33) -- Press release issued by QVC on December 1,
1993.*
(a)(34) -- Press release issued by QVC on December 9,
1993.*
(a)(35) -- Press release issued by QVC on December 10,
1993.*
(a)(36) -- Press release issued by QVC on December 14,
1993.*
(a)(37) -- Text of letter from Paramount advisor to QVC,
dated December 14, 1993.*
(a)(38) -- Text of letter from QVC advisor to Paramount
advisor, dated December 14, 1993.*
(a)(39) -- Press release issued by QVC on December 15,
1993.*
(a)(40) -- Press release issued by QVC on December 16,
1993.*
(a)(41) -- Text of letter from Paramount advisor to QVC
advisor, dated December 17, 1993.*
(a)(42) -- Text of letter from QVC advisor to Viacom advi-
sor, dated December 17, 1993.*
(a)(43) -- Text of letter from QVC to Paramount, dated De-
cember 20, 1993.*
(a)(44) -- Press release issued by QVC on December 20,
1993.*
(a)(45) -- Press release issued by QVC on December 20,
1993.*
(a)(46) -- Second Supplement to the Offer to Purchase,
dated December 23, 1993.*
(a)(47) -- Second Revised Letter of Transmittal.*
(a)(48) -- Second Revised Notice of Guaranteed Delivery.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(a)(49) -- Second Revised Form of Letter to Brokers, Deal-
ers, Commercial Banks, Trust Companies and Nomi-
nees.*
(a)(50) -- Second Revised Form of Letter to Clients for use
by Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(51) -- Second Revised Form of Letter to Participants in
the Dividend Reinvestment Plan of Paramount Com-
munications Inc.*
(a)(52) -- Press release issued by QVC on December 22,
1993.*
(a)(53) -- Press release issued by QVC on December 27,
1993.*
(a)(54) -- Press release issued by QVC on January 7, 1994.*
(a)(55) -- Press release issued by QVC on January 10,
1994.*
(a)(56) -- Text of letter from QVC advisor to Paramount,
dated January 11, 1994.
(b)(1) -- Commitment Letters, dated September 30, 1993, by
and between QVC and certain banks.*
(b)(2) -- Commitment Letters, dated November 19, 1993, by
and between QVC and certain banks.*
(b)(3) -- Bank Credit Agreement, dated as of January 7,
1994, by and between QVC and certain banks.*
(c)(1) -- Commitment Letter, dated October 15, 1993, by
and among QVC and certain investors named there-
in.*
(c)(2) -- Stockholders Agreement, dated July 16, 1993,
among Liberty Media Corporation, Comcast Cor-
poration, Arrow Investments, L.P. and certain
affiliates and subsidiaries of such parties.*
(c)(3) -- Agreement Among Stockholders, dated October 15,
1993.
(c)(4) -- Proposed form of merger agreement delivered by
QVC to Paramount.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(c)(5) -- First Amended and Supplemental Complaint in QVC
Network, Inc. v. Paramount Communications Inc.
filed October 28, 1993 in the Delaware Chancery
Court.*
(c)(6) -- Voting Trust Agreement, dated as of October 28,
1993, between QVC and G. William Miller.*
(c)(7) -- Informational request from QVC to Paramount,
dated November 1, 1993.*
(c)(8) -- Fair bidding procedures delivered by QVC to Par-
amount on November 1, 1993.*
(c)(9) -- Proposed form of merger agreement delivered by
QVC to Paramount on November 1, 1993.*
(c)(10) -- Commitment Letter, dated November 11, 1993, by
and among QVC and certain investors named
therein.*
(c)(11) -- Memorandum of Understanding, dated November 11,
1993, by and between QVC and BellSouth.*
(c)(12) -- Liberty-QVC Agreement, dated November 11, 1993,
by and between QVC and Liberty.*
(c)(13) -- Agreement Among Stockholders, dated November 11,
1993, among QVC, Advance, Arrow, BellSouth, Com-
cast and Cox.*
(c)(14) -- Understanding Among Stockholders, dated November
11, 1993, among Arrow, BellSouth, Comcast and
Liberty.*
(c)(15) -- Agreement Containing Consent Order and Interim
Agreement, dated November 12, 1993, among the
FTC, Liberty, and TCI.*
(c)(16) -- BellSouth Commitment Letter, dated November 19,
1993, by and between BellSouth and QVC.*
(c)(17) -- Memorandum Opinion and Preliminary Injunction
Order in QVC Network, Inc. v. Paramount Com-
munications, Inc., C.A. No. 13208, both dated
November 24, 1993, entered by Delaware Chancery
Court.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(c)(18) -- Revised Memorandum Opinion, dated November 26,
1993, in QVC Network, Inc. v. Paramount Communi-
cations, Inc., C.A. No. 13208, entered by Dela-
ware Chancery Court.*
(c)(19) -- Order, dated December 9, 1993, in Paramount Com-
munications Inc. v. QVC Network, Inc., C.A. No.
13208, entered by Delaware Supreme Court.*
(c)(20) -- Proposed form of merger agreement delivered by
Paramount to QVC on December 14, 1993.*
(c)(21) -- Text of letter from QVC advisor to Paramount
advisor, dated December 10, 1993.*
(c)(22) -- Text of letter from Paramount advisor to QVC
advisor, dated December 14, 1993.*
(c)(23) -- Agreement and Plan of Merger, between Paramount
and QVC, dated as of December 22, 1993.*
(c)(24) -- Exemption Agreement, between Paramount and QVC,
dated December 22, 1993.*
(c)(25) -- Voting Agreement, dated December 22, 1993, among
BellSouth, Comcast, Cox, Advance and Arrow.*
(c)(26) -- First Amendment, dated as of December 27, 1993,
to Agreement and Plan of Merger, between Para-
mount and QVC.*
(c)(27) -- Letter Agreement, dated as of December 20, 1993,
by and among QVC, Comcast, Cox, Advance and
BellSouth.*
_____________________
* Previously filed.
<PAGE>
Exhibit (a)(56)
[LETTERHEAD OF WACHTELL, LIPTON, ROSEN & KATZ]
January 11, 1994
The Board of Directors
Paramount Communications Inc.
15 Columbus Circle
New York, NY 10023
Ladies and Gentlemen:
The eleventh-hour offer by Blockbuster/Viacom
announced Friday afternoon blatantly violates the terms of the
bidding procedures established by the Paramount Board and
agreed to by QVC and Viacom. It is incumbent upon the
Paramount Board to take appropriate action, consistent with its
agreements with QVC and Viacom, to enforce the bidding
procedures. Both QVC and the Paramount stockholders are
entitled to such action by the Board.
It is evident, and indeed Viacom has in effect
admitted, that the new Blockbuster/Viacom offer was announced
-- not as a bona fide competitive offer -- but primarily to
extend QVC's offer and to prevent QVC from receiving at least
50.1% of the Paramount common stock before the expiration of
its offer on Friday, January 7. Such action is expressly
prohibited by the agreements entered into by the parties, see
Viacom-Paramount Exemption Agreement, Section 2.01(a), and
represents a bad faith, cynical and manipulative scheme to
abuse the bidding process. Thus:
1. Blockbuster and Viacom announced their new offer
only minutes before the close of the market on Friday,
January 7, only hours before QVC's offer was set to
expire.
<PAGE>
<PAGE>
The Board of Directors
January 11, 1994
Page 2
2. The purposeful, grossly front-end-loaded nature
of the Blockbuster/Viacom offer at that late hour created
inevitable confusion in the market. Moreover, Viacom
compounded the confusion by causing the premature
cessation of trading in its own shares and falsely
representing to the marketplace that "QVC would also be
required to extend its offer to expire no earlier than"
January 21. By virtue of the fact that Viacom's offer was
in breach of the parties' agreements, QVC was not so
obligated. See QVC-Paramount Merger Agreement, Section
2.1(d) and (e). As described yesterday in The New York
Times, Viacom's tactic of a last-minute announcement and
the heavily front-end-loaded offer produced "the power of
a misleading headline" for an offer whose blended value
"was clearly less than the value of the QVC offer." It is
plain that Viacom's abusive and misleading tactics
deterred stockholders from tendering into QVC's superior
offer before the midnight deadline and was expressly
intended to do so.
3. Indeed, in a teleconference with analysts,
Viacom was obliged to concede that the then-$79.23 blended
value of its offer (by Viacom's own estimate) was
substantially lower than the approximate $84.66 value of
QVC's bid as of the market close on that day. Market
activity since then has confirmed QVC's recognition that
not only is the new offer lower than QVC's (by, as of
close of market today, approximately $720 million or $5.88
per Paramount share), but it is not even worth more than
Viacom's own prior offer.
4. According to published reports, on Saturday,
January 8, the President and Chief Executive Officer of
Viacom admitted the true purpose of the new offer when he
stated to Reuters that the Blockbuster/Viacom offer was
nothing more than "essentially a re-jigging of Viacom's
previous bid"; that the Blockbuster/Viacom offer reflects
Paramount's "full value"; and that "Paramount was not
worth more than current bid levels."
The bidding procedures agreed upon by the parties
were designed to obtain higher -- not lower -- values for
Paramount stockholders, while assuring fairness between the
competing bidders. Viacom's conduct makes a mockery of these
procedures: on the first deadline, December 20, 1993, Viacom
declined to raise noticeably its earlier offer -- albeit that
offer was plainly lower than QVC's outstanding offer; on the
second deadline, Viacom bid lower, not higher. Viacom's
tactics have been designed solely to prolong the bidding
process, forestall QVC's rightful victory and delay the receipt
<PAGE>
<PAGE>
The Board of Directors
January 11, 1994
Page 3
of value by Paramount stockholders. Neither Paramount, QVC,
nor Paramount's public stockholders obtain any benefit from the
"re-jigging" of an already-inferior offer, and the costs and
risks of delay in consummating the QVC-Paramount merger are
significant.
In stark contrast to Viacom's conduct, throughout
this bidding process QVC has consistently complied with both
the letter and spirit of the bidding procedures -- by
submitting a substantially increased bid on December 20 and,
now, by further extending its offer so that the Minimum
Condition may be met.
Viacom is in breach of its contract with Paramount
and its conduct is wrongful both to QVC and to the Paramount
stockholders. QVC requests that the Paramount Board at its
meeting tomorrow take appropriate action:
1. Confirming the Board's unanimous recommendation
to Paramount stockholders that the QVC offer and second-
step merger are fair to and in the best interests of
Paramount stockholders and that Paramount stockholders
accept QVC's offer;
2. Declaring that the new Viacom offer is in breach
of the Exemption Agreement between Paramount and Viacom
and disentitles Viacom to the rights it otherwise would
have under that agreement;
3. Confirming -- at a minimum -- that Viacom will
not be permitted to gain an improper advantage from having
wrongfully made an offer "primarily to extend the
expiration date" of QVC's offer; that no new Viacom offer
during this extension period will operate to place any
obligation on QVC to further extend its offer prior to
receiving 50.1% of Paramount stock; and that the Paramount
stockholders are assured that, if by midnight, January 21,
1994, they choose to tender 50.1% or more of Paramount
shares into the QVC offer, that offer will be successful
and stockholders will not be further delayed in obtaining
value; and
4. In light of the cynical massive front-end
loading of Viacom's current offer and to protect Paramount
stockholders from further exacerbation of the improper
front-end loading, declaring that the Paramount Board will
not consider any further Viacom offer unless such offer
redresses the imbalance.
<PAGE>
<PAGE>
The Board of Directors
January 11, 1994
Page 4
QVC expressly reserves all of its rights under the
circumstances, including the right to seek judicial redress and
to withdraw its offer pursuant to its terms and the terms of
the merger agreement. QVC and its advisors remain available to
discuss any of the foregoing with the Paramount Board or its
advisors.
Very truly yours,
/s/ Martin Lipton
Martin Lipton
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