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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
Amendment No. 20
to
SCHEDULE 14D-9
(with respect to the tender offer by QVC Network, Inc.)
--------------------
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
--------------------
PARAMOUNT COMMUNICATIONS INC.
(Name of Subject Company)
PARAMOUNT COMMUNICATIONS INC.
(Name of Person Filing Statement)
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)
--------------------
Donald Oresman, Esq.
Paramount Communications Inc.
15 Columbus Circle
New York, New York 10023-7780
(212) 373-8000
(Name, address and telephone number of person authorized
to receive notices and communications on behalf
of the person filing statement)
---------------------
Copy to:
Joel S. Hoffman, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
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<PAGE>
This Amendment No. 20 supplements and amends to the extent
indicated herein the Solicitation/Recommendation Statement on
Schedule 14D-9 of Paramount Communications Inc., filed with the
Securities and Exchange Commission on November 8, 1993 (as
supplemented and amended through the date hereof, the "Schedule
14D-9"), with respect to the Revised QVC Offer (as described
herein and therein). Capitalized terms used herein and not
otherwise defined herein have the meanings ascribed to such terms
in the Schedule 14D-9.
Item 2. TENDER OFFER OF THE BIDDER
The response to Item 2 is hereby supplemented and amended as
follows:
On January 7, 1994, QVC issued a press release, a copy
of which is filed as Exhibit No. 60 to the Schedule 14D-9
and is incorporated herein by reference.
On January 10, 1994, QVC issued a press release
announcing, among other things, the extension of the
expiration date of the Revised QVC Offer to 12:00 midnight
on January 21, 1994. A copy of QVC's press release is filed
as Exhibit No. 61 to the Schedule 14D-9 and is incorporated
herein by reference.
Item 3. IDENTITY AND BACKGROUND
The response to Item 3(b) is hereby supplemented and amended
as follows:
Reference is made to the QVC press releases filed as
Exhibit Nos. 60 and 61 to the Schedule 14D-9, which press
releases are incorporated herein by reference.
Item 4. THE SOLICITATION OR RECOMMENDATION
The response to Item 4(a) is hereby supplemented and amended
as follows:
On January 7, 1994, Paramount issued a press release, a
copy of which is filed as Exhibit No. 62 to the Schedule
14D-9 and is incorporated herein by reference.
Item 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT
COMPANY
The response to Item 7(a) is hereby supplemented and amended
as follows:
On January 7, 1994, Viacom issued a press release, a
copy of which is filed as Exhibit No. 63 to the Schedule
14D-9 and is incorporated herein by reference. On January 9, 1994,
Viacom issued a press release, a copy of which is filed as
Exhibit No. 64 to the Schedule 14D-9 and is incorporated herein
by reference.
According to Amendment No. 20 to the Schedule 14D-1
filed by Viacom, Blockbuster Entertainment Corporation, a
Delaware corporation ("Blockbuster"), has joined Viacom as a
bidder in the Viacom Offer, and the address of the principal
executive offices of Blockbuster is One Blockbuster Plaza,
Fort Lauderdale, Florida 33301-1860.
Item 9. MATERIAL TO BE FILED AS EXHIBITS
The response to Item 9 is hereby supplemented and amended to
add the following:
Exhibit 60 - Press Release issued by QVC on January 7,
1994.
Exhibit 61 - Press Release issued by QVC on January 10,
1994.
Exhibit 62 - Press Release issued by Paramount on January
7, 1994.
Exhibit 63 - Press Release issued by Viacom on January 7,
1994.
Exhibit 64 - Press Release issued by Viacom on January 9,
1994.
<PAGE>
2
SIGNATURE
After reasonable 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.
PARAMOUNT COMMUNICATIONS INC.
By Donald Oresman
--------------------------
Name: Donald Oresman
Title: Executive Vice President
Dated: January 10, 1994
<PAGE>
3
EXHIBIT INDEX
Exhibit Description Page No.
- ------- ----------- --------
1* Pages 5, 6 and 10-20 of Paramount's Proxy
Statement dated January 29, 1993 for its 1993
Annual Meeting of Stockholders.
2* Employment Agreement with Robert Greenberg, a
senior vice president of Paramount, dated as of
April 5, 1993.
3* Press Release issued on November 6, 1993.
4* Letter to Stockholders of Paramount dated November
8, 1993 with respect to the Viacom Offer.
5* Letter to Stockholders of Paramount dated November
8, 1993 with respect to the QVC Offer.
6* Amended and Restated Agreement and Plan of Merger,
dated as of October 24, 1993, between Paramount
and Viacom.
7* Amendment No. 1, dated as of November 6, 1993, to
the Amended and Restated Agreement and Plan of
Merger.
8* Stock Option Agreement, dated as of September 12,
1993, as amended on October 24, 1993, between
Paramount and Viacom.
9* Voting Agreement, dated as of September 12, 1993,
as amended on October 24, 1993, between Paramount
and Amusements.
10* Press Release issued by Viacom on November 12, 1993.
11* Press Release issued on November 15, 1993.
12* Letter to Stockholders of Paramount dated November
16, 1993 with respect to the QVC Offer.
13* Press Release issued by QVC on November 20, 1993.
14* Press Release issued by Viacom on November 19, 1993.
15* Press Release issued by QVC on November 22, 1993.
16* Press Release issued by Viacom on November 22, 1993.
17* Press Release issued by QVC on November 23, 1993.
18* Press Release issued by Viacom on November 23, 1993.
19* Press Release issued by QVC on November 24, 1993.
20* Press Release issued by Viacom on November 24, 1993.
21* Memorandum Opinion in QVC Network, Inc. v.
Paramount Communications Inc., et al., Civ. Action
No. 13208 (Del. Ch. November 24, 1993).
22* Preliminary Injunction Order in QVC Network, Inc. v.
Paramount Communications Inc., et al., Civ. Action No.
13208 (Del. Ch. November 24, 1993).
23* Press Release issued by Paramount on November 24, 1993.
24* Press Release issued by Viacom on November 24, 1993.
25* Press Release issued by Viacom on November 26,1993.
26* Press Release issued by Viacom on November 29, 1993.
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* Previously filed.
<PAGE>
4
Exhibit Description Page No.
- ------- ----------- --------
27* Order of the Delaware Supreme Court dated November 29,
1993.
28* Press Release issued by QVC on December 1, 1993.
29* Revised Memorandum Opinion in QVC Network, Inc. v.
Paramount Communications Inc., et al., Civ. Action
No. 13208 (Del. Ch. November 24, 1993).
30* Press Release issued by QVC on December 10, 1993.
31* Press Release issued by Paramount on December 9, 1993.
32* Press Release issued by Viacom on December 9, 1993.
33* Order in Paramount Communications Inc., et al. v. QVC
Network, Inc., Civ. Action No. 13208 (Del. December 9,
1993).
34* Press Release issued by QVC on December 9, 1993.
35* Letter from Richards, Layton & Finger to Vice
Chancellor Jack B. Jacobs of the Delaware Court of
Chancery dated December 10, 1993.
36* Bidding Procedures of Paramount dated December 14,
1993.
37* Press Release issued by Paramount on December 14, 1993.
38* Letter to Stockholders of Paramount dated December 14,
1993 with respect to the Viacom Offer and the QVC
Offer.
39* Press Release issued by QVC on December 14, 1993.
40* Press Release issued by Viacom on December 14, 1993.
41* Press Release issued by QVC on December 16, 1993.
42* Letter from Wachtell, Lipton, Rosen & Katz to Lazard
dated December 14, 1993.
43* Letter from Simpson Thacher & Bartlett to Wachtell,
Lipton, Rosen & Katz dated December 15, 1993.
44* Press Release issued by Paramount on December 15, 1993.
45* Letter from the Delaware Chancery Court to Young,
Conaway, Stargatt & Taylor; Richards, Layton & Finger;
Morris & Morris; and Morris, Nichols, Arsht & Tunnell
dated December 14, 1993.
46* Revised pages to the Memorandum Opinion in QVC Network,
Inc. v. Paramount Communications Inc., et al., Civ.
Action No. 13208 (Del. Ch. November 24, 1993).
47* Letter from Shearman & Sterling to Lazard dated
December 15, 1993.
48* Letter from Simpson Thacher & Bartlett to Shearman &
Sterling dated December 16, 1993.
49* Letter from Simpson Thacher & Bartlett to Wachtell,
Lipton, Rosen & Katz dated December 17, 1993.
50* Press Release issued by Paramount on December 20, 1993.
51* Press Release issued by QVC on December 22, 1993.
52* Press Release issued by Paramount on December 22, 1993.
53* Agreement and Plan of Merger, dated as of December
22, 1993, between Paramount and QVC.
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* Previously filed.
<PAGE>
5
Exhibit Description Page No.
- ------- ----------- --------
54* Voting Agreement dated December 22, 1993 among
BellSouth Corporation, Comcast Corporation, Cox
Enterprises, Inc., Advance Publications, Inc. and Arrow
Investments, L.P.
55* Letter to Stockholders of Paramount dated December 23,
1993 with respect to the Revised QVC Offer and the
Viacom Offer.
56* Opinion of Lazard dated December 21, 1993.
57* Notice of Termination dated December 22, 1993 delivered
by Paramount to Viacom.
58* Exemption Agreement, dated as of December 22, 1993,
between Viacom and Paramount.
59* First Amendment, dated as of December 27, 1993, to
Agreement and Plan of Merger, dated as of December 22,
1993, between Paramount and QVC.
60 Press Release issued by QVC on January 7, 1994.
61 Press Release issued by QVC on January 10, 1994.
62 Press Release issued by Paramount on January 7, 1994.
63 Press Release issued by Viacom on January 7, 1994.
64 Press Release issued by Viacom on January 9, 1994.
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* Previously filed.
NEWS FROM QVC
QVC NETWORK, INC
GOSHEN CORPORATE PARK
WEST CHESTER, PA 19380
(215) 430-1000
For Immediate Release:
- ---------------------
West Chester, PA (January 7, 1994) -- QVC (NASDAQ: QVCN) stated tonight that
it believes that the new Viacom offer violates the bidding procedures agreed
to among QVC, Paramount and Viacom and does not operate to trigger a new
round of bidding.
QVC intends to make an announcement with respect to the extension of its offer
prior to the opening of the market on Monday, January 10.
QVC stated that it believes the new heavily front-end loaded Viacom-Blockbuster
offer, even at the values that QVC understands Viacom to have ascribed to its
offer, is inferior to QVC's current offer. Moreover, in view of the
consideration being offered to Blockbuster stockholders in the proposed Viacom-
Blockbuster merger, QVC believes it likely that the blended value of the new
Viacom offer will be less than Viocom's estimates and even less than Viacom's
previous offer.
# # #
Contacts
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Press: Investors:
- ----- ---------
Michael Rourke of QVC William F. Costello of QVC
(212) 371-5999 (215) 430-8938
Donald Van de Mark of QVC Diana Brainerd of
(215) 429-5666 Abernathy/MacGregor/Scanlon
(212) 371-5999
QVC EXTENDS TENDER OFFER
WEST CHESTER, Pa., Jan. 10 -- QVC (NASDAQ: QVCN) announced today
that it has extended the expiration date of its tender offer for 50.1%
of the common stock of Paramount Communications Inc. (NYSE: PCI) to 12
midnight, New York City time on Friday, Jan. 21, 1994. As of 12 midnight,
New York City time on Friday, Jan. 7, 1994, approximately 26,843,070 shares
of Paramount common stock had been tendered in the offer.
QVC is informing the Paramount Board of Directors of QVC's position that
Viacom has violated the bidding procedures and QVC is requesting that
Paramount take appropriate action in light of that violation. QVC will await
the action of the Paramount Board on Wednesday before deciding what
additional action to take.
CONTACT: Press: Michael Rourke, 212-371-5999 or Donald Van de Mark,
215-429-5666, both of QVC; or Investors: William F. Costello of QVC,
215-430-8938, or Diana Brainerd of Abernathy/MacGregor/Scanlon, 212-371-5999
PARAMOUNT COMMUNICATIONS BOARD TO CONVENE NEXT WEEK
NEW YORK, Jan. 7 -- Paramount Communications, Inc. (NYSE: PCI) said
today that its board of directors will convene next week to consider
Viacom's (AMEX: VIA) revised proposal to acquire Paramount, announced
earlier today.
CONTACT: Jerry Sherman, 212-373-8725, or Carl D. Folta, 212-373-8530,
both of Paramount Communications, or Jeff Taufield of Kekst and Company,
212-593-2665.
BLOCKBUSTER AND VIACOM ANNOUNCE $8.4 BILLION MERGER
VIACOM INC. INCREASES ITS TENDER OFFER TO $105 PER SHARE FOR
50.1% OF PARAMOUNT STOCK
- - Market Capitalization of Combined
Viacom/Blockbuster/Paramount
Valued at $26 Billion -
New York, New York, January 7, 1993 -- Viacom Inc. (ASE: VIA
and VIAB) and Blockbuster Entertainment Corporation (NYSE: BV)
today announced they have entered into a definitive merger
agreement under which Blockbuster will merge into Viacom.
Under the terms of the agreement, which was unanimously
approved by the Boards of Directors of both companies,
Blockbuster shareholders will receive .08 of a share of Viacom
Class A Common Stock, and .60615 of a share of Viacom Class B
Common Stock, and one variable common right (VCR) for each
share of Blockbuster. The transaction is valued at $8.4
billion, based on the closing market prices of Viacom stock on
January 6, 1994. The combined Viacom/Blockbuster company will
be named Viacom-Blockbuster Inc.
Viacom also announced an increase to $105 per share, or $6.5
billion, for the 50.1% in cash consideration to be paid to
shareholders of Paramount Communications Inc. (NYSE: PCI)
under its revised tender offer.
- -more-
- -2-
Viacom and Blockbuster together announced that, subject to the
consummation of Viacom's tender offer for Paramount,
Blockbuster has agreed to invest $1.25 billion in Viacom by
purchasing approximately 23 million shares of Viacom Class B
Common Stock at $55.00 per share. The shares purchased by
Blockbuster will reduce the number of shares previously
<PAGE>
offered to existing Paramount shareholders, placing shares
that would otherwise have been distributed to public
shareholders in the hands of Blockbuster. The additional cash
component of this transaction, provided by the Blockbuster
investment, will provide Paramount shareholders with increased
monetary consideration and added value, with virtually no
dilution to shareholders. In the context of the ultimate
combination of Viacom, Blockbuster and Paramount, the
resulting company will enjoy a significantly strengthened
capital structure. Upon the completion of the Paramount
acquisition, the company will be renamed.
"The combination of Viacom with Blockbuster and Paramount
creates a uniquely diversified portfolio of global
entertainment assets and operations with extraordinary
capacity to exploit worldwide opportunities. The potential
for the exploitation and expansion of brand names and
franchises will be dramatic," said Sumner M. Redstone,
Chairman of the Board of Viacom.
"Blockbuster's established relationships with customers and
large presence in the retail video and music markets provide
Viacom with important access and distribution to consumers of
entertainment products.
- -more-
- -3-
"We look forward to welcoming Blockbuster and its employees to
the Viacom family. Blockbuster's headquarters will be
maintained in Ft. Lauderdale.
"From the very beginning, Viacom's strategic rationale for
joining forces with Paramount was the creation of a new global
entertainment powerhouse with an array of complementary,
world-class assets in a wide variety of entertainment and
communication businesses," Mr. Redstone stated.
H. Wayne Huizenga, Chairman of the Board of Blockbuster, said,
"This transaction is an exciting development for our company
and our shareholders, reflecting the vision we share with
Viacom related to building a global integrated entertainment
company. Blockbuster's retail distribution systems and our
programming and production business together with Viacom's
entertainment franchises represent a formidable combination."
William C. Ferguson, Chairman of NYNEX Corporation, expressing
strong support for today's announcement, said, "We initially
<PAGE>
joined forces with Viacom in our belief that Viacom presented
numerous opportunities to leverage our existing businesses by
pursuing joint opportunities. We continue to believe that a
combined Viacom/Blockbuster/ Paramount will bring value to
NYNEX."
With the completion of the merger, Mr. Redstone will become
Chairman of the Board of the combined company and will own 61%
of the combined company's voting stock. With the completion
of the Blockbuster merger, Mr. Huizenga will
- -more-
- -4-
become Vice Chairman of the combined company. This new entity
will have a mutually agreed upon Board of Directors consisting
of six Directors designated by Viacom, three Directors
designated by Blockbuster, including Mr. Huizenga and Steven
R. Berrard, Blockbuster's Vice Chairman, two Directors
designated by NYNEX Corporation, including William C.
Ferguson, Chairman of NYNEX Corporation and a current Director
of Viacom's board, and one independent Director.
The Tender Offer for Paramount and Related Merger
Viacom's tender offer has been extended to Friday, January 21,
1994. Under the terms of the Exemption Agreement between
Viacom and Paramount and the Agreement and Plan of Merger
between QVC Network Inc. and Paramount, Viacom said that QVC
would also be required to extend its offer to expire no
earlier than that date. As permitted by the terms of the
Exemption Agreement, Viacom's amended tender offer is for
50.1% of the outstanding shares of the common stock of
Paramount. Viacom's offer contemplates the execution of a
definitive merger agreement with Paramount providing for the
conversion of each share of Paramount that is not acquired
pursuant to the offer into the right to receive .93065 shares
of Viacom Class B Common Stock and .30408 of a share of
Viacom's convertible preferred stock. Viacom said that as of
the close of business on Thursday, January 6, 1994,
approximately 2,305,900 shares of Paramount stock had been
tendered and not withdrawn.
- -more-
- -5-
Under the Exemption Agreement, Paramount is required to
execute the definitive merger agreement if 50.1% of the
<PAGE>
outstanding shares of Paramount are validly tendered for
Viacom's offer and not withdrawn by its expiration date.
Other terms of Viacom's offer, including the terms of the
convertible preferred stock in the merger with Paramount, are
substantially unchanged from Viacom's existing offer.
The Blockbuster/Viacom Merger
The merger of Blockbuster into Viacom, which is intended to be
tax-free, is subject to customary conditions, including
approval of shareholders of both companies. However, the
merger is not conditioned upon consummation of Viacom's tender
offer or any other transaction involving Paramount.
Viacom said that certain Blockbuster shareholders holding
approximately 22.7% of the outstanding Blockbuster shares,
including Mr. Huizenga and Mr. Berrard, had granted Viacom
proxies to vote in favor of the proposed merger. Viacom also
said that certain Blockbuster shareholders granted Viacom
options to purchase a portion of such shares amounting to 6.1%
of Blockbuster's outstanding shares at a price of $30.125 per
share. Mr. Huizenga and Mr. Berrard were among the
Blockbuster stockholders who provided Viacom with stock
options and proxies with respect to their personal holdings of
shares.
The variable common rights (VCRs) to be issued in connection
with this transaction convert into Viacom Class B shares under
certain circumstances. The number of Viacom Class B shares
into which the VCRs will convert will
- -more-
- -6-
generally be based upon the highest 30 consecutive trading day
average price for Viacom Class B Common Stock during the 90
trading days prior to the conversion date, which occurs on the
first anniversary of the completion of the Blockbuster merger.
In the event that such value is less than $48 per share and
more than $40 per share, the VCRs will convert into the right
to receive .05929 of a share of Viacom Class B Common Stock.
If such value is below $40 per share, such number of shares
will increase ratably to the maximum of .13829 of a share of
Viacom Class B Common Stock at a value of $36 per share or, if
such value is above $48 per share, the number of shares into
which the VCR will convert will decrease ratably to have no
value at a price of $52 per share. The upward adjustment in
the value of the VCR in excess of .05929 of a share of Viacom
Class B Common Stock will not be made in the event that,
during any 30 trading day period following the completion of
the merger and prior to the conversion date, the average
<PAGE>
closing price exceeds $40 per share. In the event that during
any such period such average price exceeds $52 per share, the
VCR will terminate.
Smith Barney Shearson Inc. is acting as financial advisor to
Viacom and is also dealer manager in connection with the
Offer, and Georgeson & Co. is acting as information agent.
Merrill Lynch & Co. is acting as financial advisor to
Blockbuster.
- -more-
- -7-
Viacom Inc. is the holding company parent of Viacom
International Inc., which together own and operate basic cable
and premium television networks (MTV, MTV Europe, Nickelodeon,
Nick at Nite, VH-1, Showtime, The Movie Channel and FLIX); own
one-half of Comedy Central and All News Channel and one-third
of Lifetime; own SET Pay Per View, which provides events for
the pay-per-view industry; own a leading provider of
programming to the backyard dish market; produce and
distribute programming for television exhibition; develop and
publish interactive software; own cable systems serving more
than 1.1 million customers; and own five television stations
and 14 radio stations. National Amusements, Inc., a closely
held corporation, owns approximately 76 percent of Viacom
Inc.'s Class A and Class B common stock, on a combined basis.
National Amusements, Inc. owns and operates approximately 800
movie screens in the United States and the United Kingdom.
Blockbuster Entertainment Corporation, a global leader in the
entertainment industry, is the world's largest home video
retailer and one of the world's largest music retailers. At
December 31, 1993, Blockbuster had 3,593 video stores (2,698
company-owned and 895 franchise-owned) operating in nine
countries and domestically in 49 states, and 511 music stores
(including 20 megastores in a joint venture with the Virgin
Retail Group) in seven countries and throughout the United
States. Blockbuster also owns 70.5% of Spelling Entertainment
Group Inc. and an equity stake in Republic Pictures
Corporation, both of which are leading producers and worldwide
distributors of motion picture and television entertainment.
The company also owns a 19.6% equity stake in Discovery
- -more-
- -8-
<PAGE>
Zone, Inc. (NASDAQ: ZONE), which owns and franchises indoor
children's recreational fitness centers known as FunCenters.
In addition, the company has franchise rights to develop 100
Discovery Zone FunCenters in the U.S. and formed a joint
venture with Discovery Zone to develop 10 FunCenters in the
U.K. Blockbuster also has a six-month option to acquire 50.1%
of Discovery Zone.
# # #
Viacom/Blockbuster/Paramount Merger Fact Sheet Attached
Contact: Viacom Inc. Edelman
Raymond A. Boyce Elliot Sloane
(212) 258-6530 (212) 704-8126
Blockbuster Entertainment Corp.
Greg Fairbanks Wally Knief
(305) 832-3522 (305) 832-3250
<PAGE>
VIACOM/BLOCKBUSTER/PARAMOUNT MERGER FACT SHEET
Financial Highlights:
$9 billion in revenues
$1.5 billion in operating cash flow
$26 billion in assets
$14 billion in stockholders' equity
40,000-plus employees
Corporate Profile: The combination of Viacom, Blockbuster and
Paramount, will create a global leader in the production and
distribution of entertainment and communication products, with
an array of world-class franchises and brand names. The
companies participate in the fastest growing segments of the
entertainment marketplace, including:
- -- Cable network programming
- -- Video, music and interactive retail distribution
- -- Motion picture and television production
- -- Cable television systems
- -- Television and radio broadcasting
- -- Entertainment centers, theme parks
- -- Publishing
- -- Interactive/Multimedia products
- -- Motion picture theaters
Cable Network Programming: Viacom owns and operates the
largest group of basic and premium networks, including MTV,
<PAGE>
MTV Europe, Nickelodeon, Nick at Nite, Showtime, The Movie
Channel and FLIX. Viacom's brand equity and global impact is
unparalleled. In addition to its significant domestic
distribution, MTV now reaches more than 251 million homes in
88 territories around the world. Viacom also participates in
three joint venture cable services: Comedy Central, Lifetime
and All News Channel.
-2-
Paramount is co-owner of USA Network, a leading
advertiser-supported basic cable television network. USA
includes the Sci-Fi Channel, a basic cable channel devoted
exclusively to science fiction, horror and adventure
programming. In addition, Paramount's Madison Square Garden
Network is the largest regional cable sports network in the
country, providing programming to nearly 5 million subscribers
through 231 affiliates.
Video, Music and Interactive Retail Distribution: With more
than 3,500 video stores operating in nine countries and
domestically in 49 states, Blockbuster is the largest retailer
of home video products in the world. Growing from a base of
19 video stores just six years ago, Blockbuster now commands
more than 15% of the domestic home video market and is larger
than the next 550 competitors combined. The home video
marketplace is larger than that of movie theaters, premium
cable and pay-per-view combined. Blockbuster's growth in this
explosive marketplace is expected to continue into the future.
Blockbuster also is a leader in the retail distribution of
music product. With the acquisitions of the Sound Warehouse,
Music Plus, and Super Club music retail chains, the recent
development of the Blockbuster Music Plus concept, and the
joint venture agreement with Virgin Retail Group to build
megastores around the world, Blockbuster operates more than
500 music stores in seven countries and throughout the United
States.
With more than 600 million consumer visits to its retail
stores each year and an active data base of more than 40
million consumers who have rented and purchased product in
their retail stores, Blockbuster is the leading global retail
distributor of entertainment product in the world.
Motion Picture and Television Production: Through its recent
investments in both Spelling Entertainment Group and Republic
<PAGE>
Pictures Corporation, Blockbuster is now a leading producer
and distributor of filmed entertainment, with over 20,000
hours of programming available for domestic and international
distribution.
Blockbuster owns 70.5% of Spelling, a producer and distributor
of filmed entertainment supported by a film library of
approximately 12,000 hours. This library includes more than
55 off-network series, such as Little House on the Prairie,
Dallas, Twin Peaks, and an array of feature films including
Basic Instinct, Total Recall, Platoon, and the Rambo trilogy.
Spelling also is the producer of the hit network series
Beverly Hills 90210 and Melrose Place.
Blockbuster owns approximately 37% of Republic, an independent
producer and distributor of filmed entertainment. Republic
distributes its extensive classic library and contemporary
product to television, home video and theaters across the
world. Republic is the 10th largest distributor in the home
video industry. Its library includes The Quiet Man, High
Noon, as well as the popular television series Bonanza.
-3-
Viacom has an enormous syndication library that includes
Roseanne, The Cosby Show, A Different World, I Love Lucy, The
Twilight Zone and Hawaii 5-0. It also produces programs for
broadcast television, including Matlock, Diagnosis Murder, and
the Perry Mason made-for-TV movies. Viacom's first-run
syndication programs include The Montel Williams Show, Nick
News and This Morning's Business.
Paramount Pictures produces motion pictures for distribution
to theatrical markets in the United States and abroad.
Paramount has a motion picture library of approximately 890
films. In video, Paramount holds leadership positions.
Paramount Television is at the forefront in the production and
distribution of television programming for commercial
networks, first-run syndication and cable services, currently
producing 30 1/2 hours weekly. Its network programming lineup
for the 1993-1994 television season includes, Wings, Frasier,
Big Wave Dave's, Viper, The Mommies and Sister Sister. In
first-run syndication, Paramount produces Star Trek: The Next
Generation, Deep Space Nine, The Untouchables, Entertainment
Tonight, The Maury Povich Show, The Arsenio Hall Show and Hard
Copy. The Paramount television library includes Cheers, Star
Trek, Happy Days, Laverne & Shirley and Taxi.
<PAGE>
Cable Television Systems: Viacom Cable owns and operates
cable television systems in three regions of the U.S. serving
approximately 1.1 million subscribers. In mid-1994, Viacom,
in conjunction with AT&T, will be launching a test of consumer
acceptance of interactive entertainment and information
services at its Castro Valley, California, cable system.
Television and Radio Broadcasting: Viacom owns five
network-affiliated television stations (three NBC and two CBS
affiliates) and 14 radio stations, making it the sixth largest
radio group in the U.S., ranked by market reach.
The Paramount Stations Group owns and operates four
independent and three Fox-affiliated stations.
Publishing: Paramount Publishing, through such major imprints
as Simon & Schuster, Pocket Books, Silver Burdett Ginn, and
Prentice Hall, is one of the world's leading publishers of
educational materials, from textbooks to computer-based
learning systems, and has significant operations serving the
domestic and international consumer and business, technical
and professional markets.
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Entertainment Facilities and Theme Parks: Through its 19.6%
equity in Discovery Zone, Inc., which owns and franchises
indoor children's recreational fitness centers known as
FunCenters, Blockbuster has a strong presence in the
entertainment center marketplace. The company has franchise
rights to develop 100 Discovery Zone FunCenters in the U.S.
and formed a joint venture with Discovery Zone to develop 10
FunCenters in the U.K. Blockbuster also has a six-month
option to acquire 50.1% of Discovery Zone.
This year, Blockbuster opened the initial phase of a family
entertainment facility called Blockbuster Golf and Games, in
Sunrise, Florida. Additional entertainment facilities are
planned at various other U.S. sites.
<PAGE>
Blockbuster recently announced a joint venture with Sony Music
Entertainment (SME) and Pace Entertainment where the three
companies combined their seven existing amphitheaters into a
partnership to be managed by Pace. Existing locations are in
Charlotte, Phoenix, San Bernadino, Pittsburgh, Raleigh,
Houston and Nashville.
Paramount owns and operates five regional theme parks.
Paramount also owns and operates Madison Square Garden, one of
the premiere showplaces for sports, concerts and other live
entertainment, at its Arena and the Paramount Theater, as well
as the New York professional basketball and hockey team
franchises, the Knicks and the Rangers.
Interactive/Multimedia Products: Viacom New Media and
Paramount Technology Group both develop and publish
interactive software for a variety of platforms in the
multimedia marketplace. Paramount's Computer Curriculum unit
is the country's foremost and fastest-growing producer of
computer-based learning systems. Blockbuster also is the
largest wholesaler and retailer of interactive home video
games in the world.
Motion Picture Theaters: Paramount owns the Famous Players
motion picture theater chain, which has 441 screens in Canada.
Paramount is also joint-owner of the 341-screen Cinamerica
theater circuit, and reaches 345 screens in nine countries
through a joint venture, United Cinemas International.
VIACOM STATES ITS SUPERIOR TENDER OFFER FOR PARAMOUNT COMPLIES
WITH ALL BIDDING PROCEDURES AND IS NOT COERCIVE
NEW YORK -- In response to certain unfounded statements by QVC Network
Inc., Viacom Inc., stated Sunday that Viacom's revised offer for Paramount
Communications Inc. fully complies with the bidding procedures agreed
to among Paramount, Viacom and QVC and that under those procedures QVC is
required to extend its tender offer until 12 midnight on Jan. 21, 1994.
Viacom also has stated that it believes that its offer is superior to
QVC's current offer. Viacom's revised offer increases the cash consideration
to Paramount stockholders by more than $1.1 billion over its previous offer
and by more than $800 million over QVC's current offer.
Viacom also stated that it believes the securities offered in the
second step merger should be compared to those of QVC in light of the
value that would be created by the larger, more diversified and
financially strengthened combination of Viacom, Paramount and
Blockbuster.
Viacom stated that Paramount stockholders should be given the
opportunity to make an informed choice between the Viacom and QVC
offers, as required by the bidding procedures.
Furthermore, Viacom fully intends to comply with the requirement of
the bidding procedures to extend its offer for 10 business days after
satisfaction of its minimum condition of 50.1%, the same minimum
condition as QVC.
Because shares tendered into the Viacom tender offer would be
prorated, this means that all Paramount stockholders would be given
the opportunity to participate in the blended value of Viacom's
tender offer and the consideration to be offered in the second-step
merger between Viacom and Paramount. Accordingly, Viacom's offer is
not coercive and offers all Paramount stockholders the same
consideration for their shares.
* * *
CONTACT: Viacom Inc, New York
Raymond A. Boyce, 212/258-6530
or
Edelman
Elliot Sloane, 212/704-8126
