____________________________________________________________
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. 31)
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.
(b) On January 20, 1994, QVC's legal advisor sent a
letter to Paramount in which it stated that QVC believes the
Offer is superior to the Viacom-Blockbuster Offer, as revised
on January 18, 1994 (the "Revised Viacom-Blockbuster Offer"),
and that it is the Paramount Board's fiduciary duty to continue
to recommend the Offer. The text of the letter and of an
accompanying memorandum from QVC's financial advisor is
attached hereto as Exhibit (a)(63), and the foregoing
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.*
_____________________
* Previously filed.
-3-
<PAGE>
<PAGE>
(a)(29) -- Press release issued by QVC on November 22,
1993.*
(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.*
(a)(57) -- Text of letter from Paramount to QVC advisor,
dated January 13, 1994.*
(a)(58) -- Text of letter from Paramount advisor to QVC
advisor, dated January 13, 1994.*
(a)(59) -- Text of letter from QVC advisor to Paramount
advisor, dated January 14, 1994.*
_____________________
* Previously filed.
-5-
<PAGE>
<PAGE>
(a)(60) -- Text of letter from Paramount advisor to QVC
advisor, dated January 18, 1994.*
(a)(61) -- Text of letter from Paramount advisor to QVC
advisor, dated January 18, 1994.*
(a)(62) -- Press release issued by QVC on January 19,
1994.*
(a)(63) -- Text of letter from QVC advisor to Paramount,
dated January 20, 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.*
(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.*
_____________________
* Previously filed.
-6-
<PAGE>
<PAGE>
(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.*
(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.*
_____________________
* Previously filed.
-7-
<PAGE>
<PAGE>
(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.*
(c)(28) -- Text of Letter, dated January 5, 1994, from
Paramount and agreed to by QVC.*
_____________________
* 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 21, 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 21, 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 21, 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.*
(a)(57) -- Text of letter from Paramount to QVC advisor,
dated January 13, 1994.*
(a)(58) -- Text of letter from Paramount advisor to QVC
advisor, dated January 13, 1994.*
(a)(59) -- Text of letter from QVC advisor to Paramount
advisor, dated January 14, 1994.*
(a)(60) -- Text of letter from Paramount advisor to QVC
advisor, dated January 18, 1994.*
(a)(61) -- Text of letter from Paramount advisor to QVC
advisor, dated January 18, 1994.*
(a)(62) -- Press release issued by QVC on January 19,
1994.*
(a)(63) -- Text of letter from QVC advisor to Paramount,
dated January 20, 1994.
(b)(1) -- Commitment Letters, dated September 30, 1993, by
and between QVC and certain banks.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(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.*
(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.*
_____________________
* Previously filed.
<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.*
(c)(26) -- First Amendment, dated as of December 27, 1993,
to Agreement and Plan of Merger, between Para-
mount and QVC.*
_____________________
* Previously filed.
<PAGE>
<PAGE>
(c)(27) -- Letter Agreement, dated as of December 20, 1993,
by and among QVC, Comcast, Cox, Advance and
BellSouth.*
(c)(28) -- Text of Letter, dated January 5, 1994, from
Paramount and agreed to by QVC.*
_____________________
* Previously filed.
<PAGE>
Exhibit (a)(63)
[LETTERHEAD OF WACHTELL, LIPTON, ROSEN & KATZ]
January 20, 1994
VIA FACSIMILE
Donald Oresman, Esq.
Paramount Communications Inc.
15 Columbus Circle
New York, New York 10023-7780
Dear Don:
I enclose herewith an analysis that Allen & Company
has provided to QVC with respect to the QVC and Viacom offers.
QVC believes that its offer continues to be superior to the
Viacom offer and that it is the Paramount Board's fiduciary
duty to continue to recommend the QVC offer.
Sincerely
/s/ Martin Lipton
Martin Lipton
Enclosure
cc: Messrs. Richard I. Beattie
Felix Rohatyn
(with enclosure)
<PAGE>
<PAGE>
MEMORANDUM
TO: QVC Network, Inc.
FROM: Allen & Company Incorporated
DATE: January 20, 1994
The following analysis is being provided to assist
you in comparing the QVC-Paramount merger to the Viacom-Para-
mount and Viacom-Paramount-Blockbuster transactions.
Our analysis includes comparisons of:
1. Market value of the transactions
2. Financial soundness of the transactions
3. Consensus trading prices for post-merger securities of QVC
and Viacom
4. Comparative liquidity of the common stocks of QVC and Via-
com
We believe that beyond this quantitative analysis
there are substantive qualitative factors that affect the in-
tegrity and value of the Viacom offer which involve the CVRs
and VCRs being issued and the nature of the operations of Via-
com and Blockbuster.
Paramount CVRs and Blockbuster VCRs are Ineffective and Detri-
mental
Paramount CVRs provide no additional downside protection
to Paramount shareholders -- Viacom stock has already bro-
ken through $38 collar
The CVRs and VCRs undermine the soundness of the securi-
ties to be issued by Viacom because they constitute a dou-
ble collar threatening significant dilution for share-
holders. This overhang creates an uncertain environment
for Viacom stock
<PAGE>
<PAGE>
Viacom would only issue stock to satisfy the Paramount CVR
if cash or debt were not available. In this scenario, by
definition, Viacom would not be performing well, its stock
would be under pressure and it would be the most dilutive
time to issue shares
If Viacom stock were to trade at $33 at the end of one
year, as predicted by Wall Street analysts, Paramount CVRs
and Blockbuster VCRs would represent an additional 53.1
million shares, or 13% of the pro forma shares outstanding
Given recent Viacom trading volumes, it would take ap-
proximately 1,316 trading days to sell this number of
shares in the open market
Viacom Assets are Under Significant Pressure
MTV's international operations are rumored to be under
attack by a new televised music video joint venture formed
by Sony, Time Warner, Thorn EMI and Philips Electronics
(WSJ 1/20/94)
- This venture would significantly limit and directly
challenge international growth potential for MTV, its
most significant growth market
- The joint venture partners control over 70% of world-
wide music
- The venture highlights MTV's vulnerability as a dis-
tributor, rather than an owner or creator of product,
because it threatens future pricing and availability
of product
Showtime is a declining asset under pressure
- Encore, the newly formed, well capitalized and ex-
tremely aggressive pay channel, has signed both Dis-
ney and MCA to long-term contracts
- Showtime is left with limited programming; only MGM
and Tri-Star under contract
- Movie Channel and Flix are negligible operations
Television production operation virtually discontinued
-2-
<PAGE>
<PAGE>
Viacom's aggressive litigation against the largest opera-
tors in the cable industry leaves the company in a vulner-
able position with regard to distribution of new program-
ming
With Blockbuster, Viacom Has Combined With a Low Technology,
Capital Intensive Video Rental Business With a Limited Lifetime
Viacom shareholders paid a premium for a high-priced re-
tail stock
- Blockbuster shares trading near all time highs when
deal announced
- Merger values Blockbuster shares at 32x earnings of
last twelve months ending 9/30/93, and 29x analyst
earnings estimates for fiscal year ending December
31, 1993
Video on demand will virtually replace Blockbuster's cur-
rent business
- Cable operators, Bell operating companies and re-
cently long-distance carriers (MCI) are significantly
increasing investment in the "information superhigh-
way" while accelerating upgrade and installation time
frames
- Recognizing the limited lifetime of its existing
business, Blockbuster management has been seeking a
merger partner of joint venture during the past few
years, with little success
Blockbuster's entry into music retail will be difficult
- Low growth
- Low margins
- High capital expenditures
- Strong competition
- Music superstore concept already exists (this was not
the case with video rental superstores). The best
music retail locations already have superstores with
existing name brand recognition
Blockbuster operations and growth are very capital inten-
sive -- suited for a company with little leverage and sig-
nificant free cash flow. Sustaining capital expenditures
at levels necessary to grow the business will be problem-
atic under a debt load in excess of $9 billion
-3-
<PAGE>
<PAGE>
I. QVC Offer is Superior to that of Viacom
Per share value of QVC offer is $4.50 greater than
that of Viacom
Total value of QVC offer is approximately $554 mil-
lion greater than that of Viacom
<TABLE>
<CAPTION>
QVC Offer Viacom Offer
Blended Blended
Per Share Per Share Per Share Per Share
<S> <C> <C> <C> <C> <C>
Cash 50.1% $92.00 $46.09 $107.00 $53.61
Stock (a) 49.9% 62.92 31.40 36.76 17.47
Preferred 49.9% 16.00 7.98 15.20 7.59
Warrant 49.9% 3.20 1.60 1.91 0.95
CVR 49.9% -- -- 5.91 2.95
$82.12 $40.98 $58.04 $28.96
Total $87.07 $82.57
(a) As of close, 1/20/94
</TABLE>
II. The Pro Forma QVC/PCI Entity Will Be More Financially
Sound than VIA/BV/PCI or VIA/PCI
Maturity of Debt
(In Millions)
<TABLE>
<CAPTION>
VIA/BV QVC
<S> <C> <C>
Short-term Debt due within one year $4,800 0
Debt or Preferred due 1-6 years 2,900 1,300
Debt or Preferred due within 6 years $7,700 $1,300
Debt or Preferred due 6-10 years 1,100 1,370
Debt or Preferred due after 10 years 933 2,220
Total Debt or Preferred $9,733 $4,890
</TABLE>
-4-
<PAGE>
<PAGE>
Terms of Financing for Tender Offer
(In Millions)
<TABLE>
<CAPTION>
VIA/BV QVC
<S> <C> <C>
Common Equity none $1,750
Preferred 1,200 1,250
Short-term Debt 4,800 --
Long-term Debt 600 2,670
Total Debt $5,400 $2,670
</TABLE>
Pro Forma Interest Coverages
(Calendar Year 1994)
<TABLE>
<CAPTION>
QVC/PCI VIA/PCI VIA/BV/PCI
<S> <C> <C> <C>
EBITDA/Interest 2.6x 2.2x 2.5x
EBITDA/Fixed Charges 2.6x 2.2x 2.4x
EBITDA/Interest 2.6x 2.0x 2.4x
with CVR (a)
EBITDA/Fixed Charges 2.6x 2.0x 2.3x
with CVR (a)
(a) Reflects additional interest costs if Viacom pays for Par-
amount CVRs in notes at end of first year.
Blockbuster has heavy lease obligations which do not show
up on the balance sheet as capitalized leases. Security
analysts have recognized these lease obligations as a form
of debt, which makes Blockbuster's capital structure more
leveraged than it appears.
</TABLE>
-5-
<PAGE>
<PAGE>
III. Consensus Trading Prices for Post-Merger Securities of
QVC and Viacom
The consensus opinion is that the combination of
QVC's management team, its partners, and its increasingly prof-
itable operations in the interactive world offer a more compel-
ling vision than the VIA/BV combination.
<TABLE>
<CAPTION>
Expected 1994 EBITDA Multiple QVC/PCI VIA/BV/PCI VIA/PCI
<S> <C> <C> <C>
Oppenheimer 14-15x 13x 12x
Kidder Peabody 13x 12x
UBS Securities -- 11x-12x 12x
Salomon Brothers -- Not comfortable with 13x
12.5x - 13.5x (Hold)
SG Warburg 15x -- 13x
</TABLE>
<TABLE>
Calculation of Pro Forma Stock Price
<S> <C> <C> <C>
1994 EBITDA (a) $790 $1,670 $1,160
estimates
Expected EBITDA
multiple (a) 15x 13x 13x
Net Firm Value $11,850 $21,710 $15,080
Less Net Debt 4,890 9,733 8,633
Equity Value $ 6,960 $11,977 $ 6,447
Implied Price Per Share $43 $33 (b) $32 (b)
Implied Price Per Share with $30 (b) $29 (b)
CVRs and VCRs
(a) Based on Wall Street analyst estimates
(b) Represents weighted price for Viacom "A" and "B" shares.
The non-voting "B" shares, which Paramount holders are
receiving, will trade at a discount to the voting "A"
shares
</TABLE>
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<PAGE>
<PAGE>
IV. Blockbuster and Paramount Mergers Will Flood Market with
Viacom Shares of Limited Liquidity
Pro Forma Shares Outstanding
(In Millions)
<TABLE>
<CAPTION>
Closely Presently Issued
Held Traded To Public Total
<S> <C> <C> <C> <C>
Viacom
Viacom Shares Currently Outstanding: 91.3 29.2 -- 120.5
New Viacom Shares Issued:
Viacom Shares Issued to BV -- -- 169.5 169.5
Viacom Shares Issued to PCI -- -- 57.1 57.1
Viacom Shares Issued for BV VCR(a) -- -- 34.1 34.1
Viacom Shares Issued for PCI CVR(a) -- -- 17.3 17.3
Total Viacom Shares 91.3 29.2 278.0 398.5
QVC
QVC Shares Outstanding 25.3 25.1 -- 50.4
QVC Shares Issued to Partners 29.2 -- -- 29.2
QVC Shares Issued to PCI -- -- 88.7 88.7
Total QVC Shares 54.5 25.1 88.7 168.3
(a) Assumes average Viacom "B" price of $33 after one year.
Viacom shares issued to Paramount and Blockbuster shareholders and those
subject to distribution are 9.5x the number of shares presently held by Via-
com public shareholders. In contrast, QVC shares to be issued are only 3.5x
the number presently held by QVC public shareholders.
</TABLE>
-7-
<PAGE>
<PAGE>
Comparison of Daily Trading Volumes
Since Announcement of Deals
<TABLE>
<CAPTION>
QVC Viacom
<S> <C> <C>
Average Weekly Volume 3,495,335 1,055,865
Average Daily Volume 699,067 211,173
New Shares Issued to Public 88,700,000 278,000,000
Trading Days Needed to Trade 127 days 1,316 days
All of Newly Issued Shares
</TABLE>
Even assuming the artificially high trading volumes of the
stocks since the deal was announced, it would take over 5
years to trade the new Viacom shares issued to the market
and six months to trade the new QVC shares issued to the
market.
-8-
<PAGE>
