UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3 )*
QVC, INC.
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
747262
(CUSIP Number)
Spencer B. Hays, Vice President
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
(212) 484-8000
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications)
September 1, 1994
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4), check the following box / /.
Check the following box if a fee is being paid with the statement
/ /. (A fee is not required only if the reporting person: (1) has a
previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1;
and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class.) (See
Rule 13d-7.)
Note: Six copies of this statement including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for the other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 747262 Page 2 of 28 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TIME WARNER INC.
IRS No. 13-1388520
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
a/ / b/ /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N.A.
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH
7 SOLE VOTING POWER
NONE
8 SHARED VOTING POWER
NONE
9 SOLE DISPOSITIVE POWER
NONE
10 SHARED DISPOSITIVE POWER
NONE
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
NONE (SEE ITEM 4)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE RESPONSE TO ROW (11)
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 747262 Page 3 of 28 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TWQ I Co., L.P.
IRS No. 13-3731833
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
a/ / b/ /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N.A.
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH
7 SOLE VOTING POWER
NONE
8 SHARED VOTING POWER
NONE
9 SOLE DISPOSITIVE POWER
NONE
10 SHARED DISPOSITIVE POWER
NONE
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
NONE (SEE ITEM 4)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE RESPONSE TO ROW (11)
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO
ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.<PAGE>
<PAGE>
The Schedule 13D of Time Warner Inc. and TWQ I Co., L.P. (the
"Reporting Persons") relating to the common stock of QVC, Inc.
("QVC") is hereby amended and restated in its entirety as set forth
below. Pursuant to Rule 13d-1(f) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), the Reporting Persons
have agreed to file one statement with respect to their ownership
of the common stock of QVC. The joint Schedule 13D of the
Reporting Persons, as amended and restated, is hereinafter referred
to as the "Statement."
This Statement is being filed to reflect the beneficial
ownership by the Reporting Persons of less than five percent of the
outstanding shares of the common stock of QVC as a result of the
cash tender offer by QVC Programming Holdings, Inc. to purchase all
outstanding shares of QVC common stock at a price of $46 per share
and all outstanding shares of QVC preferred stock at a price of
$460 per share, pursuant to an Offer to Purchase dated August 11,
1994, as described in Item 4 below.
Item 1. SECURITY AND ISSUER.
This Statement relates to the Common Stock, par value $.01 per
share (the "QVC Common Stock"), of QVC, Inc., a Delaware
corporation ("QVC"), whose principal executive offices are located
at 1365 Enterprise Drive, West Chester, Pennsylvania 19380.
Pursuant to Rule 13d-3 under the Exchange Act, this Statement also
relates to the shares of QVC Common Stock issuable upon the
conversion of shares of the Series C Preferred Stock, par value
$.10 per share, of QVC (the "QVC Series C Preferred Stock") held by
Paragon Communications, a Colorado general partnership ("Paragon"),
as discussed in Item 3 below.
Item 2. IDENTITY AND BACKGROUND.
This Statement is being filed by Time Warner Inc., a Delaware
corporation ("Time Warner"), having its principal executive offices
at 75 Rockefeller Plaza, New York, New York 10019 and TWQ I Co.,
L.P. ("TWQ I"), a Delaware limited partnership and an indirect
majority owned subsidiary of Time Warner, having its principal
offices at 75 Rockefeller Plaza, New York, New York 10019. The
General Partners of TWQ I are Warner Communications Inc. ("WCI"),
a Delaware corporation and a wholly owned subsidiary of Time
Warner, having its principal offices at 75 Rockefeller Plaza, New
York, New York 10019, American Television and Communications
Corporation ("ATC"), a Delaware corporation and a wholly owned
subsidiary of Time Warner, and Warner Cable Communications Inc.
("Warner Cable"), a Delaware corporation and a wholly owned
subsidiary of WCI. The principal offices of ATC and Warner Cable
are located at 300 First Stamford Place, Stamford, Connecticut
06902.
Time Warner is the largest media and entertainment company in
the world. Its businesses are carried on in three principal
groups: Publishing, Music and Entertainment. The Publishing group
consists principally of the publication and distribution of
magazines and books; the Music group consists principally of the
production and distribution of recorded music and the ownership and
administration of music copyrights; and the Entertainment group
consists principally of the production and distribution of motion
pictures and television programming, the distribution of video
cassettes, the ownership and operation of retail stores and theme
parks, the production and distribution of pay television and cable
programming, and the operation of cable television systems. These
businesses are conducted throughout the world through numerous
wholly owned, and in certain cases less than wholly owned,
subsidiaries and affiliates.
TWQ I is a limited partnership and an indirect majority owned
subsidiary of Time Warner with interests in the film and cable
television industries.
The name, business address, present principal occupation or
employment (and the name, principal business and address of any
corporation or other organization in which such employment is
conducted) of each director and executive officer of Time Warner is
set forth in Annex A hereto and is incorporated herein by
reference. No executive officers have been appointed to serve
TWQ I. The response to Item 2(a), (b), (c) and (f) incorporates
Annex A by reference thereto.
Neither Time Warner nor TWQ I, or to the best of the knowledge
of Time Warner or TWQ I, any of their respective executive officers
or directors, has during the last five years been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. SOURCE AND AMOUNT OR FUNDS OR OTHER CONSIDERATION.
Pursuant to an Agreement and Plan of Merger, dated as of
July 9, 1989, as amended as of September 29, 1989 (the "QVC Merger
Agreement") among CVN Companies, Inc., a Minnesota corporation
("CVN"), QVC and QVC Acquisition Corp., a wholly owned subsidiary
of QVC ("Newco"), on October 31, 1989, Newco was merged with and
into CVN (the "QVC Merger") and CVN became a wholly owned
subsidiary of QVC. As a result of the QVC Merger, each outstanding
share of common stock, no par value per share, of CVN ("CVN Common
Stock") was converted into the right to receive $19.00 in cash and
one-eighth (1/8th) of a share of QVC Common Stock (the "Exchange
Consideration"). Also, in connection with the QVC Merger, holders
of CVN's outstanding Series 1 and Series 2 common stock purchase
warrants were entitled to receive the Exchange Consideration based
upon the number of shares of CVN Common Stock into which such
warrants were exercisable, less the exercise price of such
warrants. In addition, (i) QVC offered each holder of CVN Series
2 Warrants the option to exchange such warrants for QVC common
stock purchase warrants exercisable for an equal number of shares
of QVC Common Stock at an exercise price per share of $15.125 (the
"New QVC Warrants"), and (ii) QVC offered each carrier of CVN
programming the opportunity to enter into an agreement to extend
the terms of such program carrier's carriage agreement with CVN for
ten additional years in exchange for shares of QVC Series C
Preferred Stock (each such share convertible into ten shares of QVC
Common Stock) equal to one-twentieth (1/20th) of the minimum number
of subscribers under such carriage agreement (as well as
commissions of five percent of the net sales to customers located
in the program carrier's service area).
SECURITIES OF QVC OWNED PRIOR TO THE QVC MERGER
Prior to the QVC Merger, Time Warner Investors, Inc.
("Investors"), a direct wholly owned subsidiary of WCI, and ATC,
then a direct majority owned subsidiary of Time Warner, were the
record owners, respectively, of 335,000 shares of QVC Common Stock
and 3,748 shares of the Series B Convertible Preferred Stock of
QVC, par value $.10 per share ("QVC Series B Preferred Stock")
(each such share convertible into ten shares of QVC Common Stock).
The 335,000 shares of QVC Common Stock owned by Investors were
purchased in a series of open market transactions (using working
capital) between July 11 and November 15, 1989 for an aggregate
purchase price of $5,896,563.
ATC received its 3,748 shares of QVC Series B Preferred Stock
pursuant to the terms of an affiliation agreement and an equity
participation agreement entered into by ATC and QVC in 1987.
INVESTOR'S ACQUISITION OF SECURITIES OF QVC PURSUANT TO
THE QVC MERGER.
Prior to the QVC Merger, Investors was the record owner of (i)
706,500 shares of CVN Common Stock, (ii) 1,800,000 CVN Series 1
Warrants (1,400,000 at an exercise price of $17.50 and 400,000 at
$18.125), and (iii) 750,000 CVN Series 2 Warrants at an exercise
price of $18.00. Pursuant to the terms of the QVC Merger
Agreement, on October 31, 1989, Investors received $13,423,500 in
cash and 88,312 shares of QVC Common Stock in respect of its
holdings of CVN Common Stock and $2,450,000 in cash and 225,000
shares of QVC Common Stock in respect of its holdings of CVN Series
1 Warrants. In addition, Investors accepted QVC's offer to
exchange the CVN Series 2 Warrants held by Investors for a like
number of New QVC Warrants and, accordingly, Investors received
750,000 New QVC Warrants to purchase 750,000 shares of QVC Common
Stock at $15.125 per share.
ATC'S AND PARAGON'S ACQUISITION OF SECURITIES OF QVC
PURSUANT TO THE QVC MERGER.
Prior to the QVC Merger, Time Warner had a beneficial interest
in CVN Common Stock through its control of ATC. ATC acquired its
interest in CVN in a similar fashion to the way WCI and Investors
acquired their interests (as described in the Statement on Schedule
13D related to CVN originally filed with the Securities and
Exchange Commission on November 5, 1987). Pursuant to Warrant
Agreements dated as of July 1, 1987, ATC received 969,590 CVN
Series 1 Warrants and 1,016,316 CVN Series 2 Warrants conferring,
in the aggregate, the right to purchase 1,985,906 shares of CVN
Common Stock at $18.125 per share. Pursuant to a similar warrant
agreement dated as of July 1, 1987, with comparable terms, Paragon,
of which ATC is a 50% indirect general partner (see Item 5),
acquired 270,958 CVN Series 2 Warrants to purchase 270,958 shares
of CVN Common Stock at $18.125 per share. Of the 969,590 CVN
Series 1 Warrants held by ATC, 210,526 were held by ATC for the
benefit of Paragon.
Pursuant to the terms of the QVC Merger Agreement, ATC
received $848,391 in cash and 121,198 shares of QVC Common Stock
with respect to the 969,590 CVN Series 1 Warrants held by ATC (of
which $184,210 in cash and 26,316 shares of QVC Common Stock
related to the 210,526 CVN Series 1 Warrants held by ATC for the
benefit of Paragon). In addition, ATC and Paragon accepted QVC's
offer to exchange the CVN Series 2 Warrants and, accordingly, ATC
received 1,016,316 New QVC Warrants to purchase 1,016,316 shares of
QVC Common Stock at $15.125 per share and Paragon received 270,958
New QVC Warrants to purchase 270,958 shares of QVC Common Stock at
$15.125 per share. The shares of QVC Common Stock issuable upon
exercise of Paragon's New QVC Warrants may be deemed to be
beneficially owned by ATC.
INTEREST OF ATC, PARAGON AND WARNER CABLE IN QVC SERIES C
PREFERRED STOCK.
In 1987, ATC, Paragon and Warner Cable each separately entered
into affiliation agreements with CVN to carry CVN cable
programming. In connection with the QVC Merger, QVC offered its
cable program carriers, including ATC, Paragon and Warner Cable, an
opportunity to subscribe at a price of $.10 per share for shares of
QVC Series C Preferred Stock equal to one-twentieth (1/20th) of the
minimum number of subscribers covered by such carriage agreements
in consideration for a ten year extension to the term of the
affiliation agreements then in place among such program carriers
and CVN. Pursuant to such offer, each of ATC, Paragon and Warner
Cable entered into an Equity Participation Agreement and an
Addendum to its respective CVN Affiliation Agreement. Based upon
the minimum number of subscribers covered by such affiliation
agreements, ATC, Paragon and Warner Cable received, respectively,
111,000, 21,250 and 62,500 shares of QVC Series C Preferred Stock
convertible into, respectively, 1,110,000, 212,500 and 625,000
shares of QVC Common Stock. The subscription price paid by ATC,
Paragon and Warner Cable for the shares of QVC Series C Preferred
Stock acquired pursuant to their respective equity participation
agreements was from the working capital of each company.
ACQUISITIONS OF SECURITIES OF QVC POST-QVC MERGER
Subsequent to the QVC Merger, Investors purchased 61,688
shares of QVC Common Stock in a series of open market purchases
(using working capital) between December 1 and December 8, 1989 for
an aggregate purchase price of $933,054.
On July 1, 1991, Investors acquired 25,025 shares of QVC
Common Stock for an aggregate purchase price of $250.25
(representing the par value of $.01 per share for each share
acquired) pursuant to the terms of a Standby Equity Agreement dated
as of April 30, 1991 among QVC, Comcast Financial Corporation,
Liberty Program Investments, Inc. and Investors. Investors used
working capital to purchase the 25,025 shares of QVC Common Stock
from QVC.
Pursuant to an agreement and plan of merger, Time Warner
acquired the minority interest in ATC that it did not already own
on June 26, 1992, and ATC thereby became an indirect wholly owned
subsidiary of Time Warner.
On June 30, 1992, certain wholly owned subsidiaries of Time
Warner contributed to Time Warner Entertainment Company, L.P., a
Delaware limited partnership ("TWE"), substantially all of the
assets, or the cash flow derived therefrom, of the filmed
entertainment, HBO programming and cable businesses of Time Warner,
and certain other assets, subject to certain liabilities, and
subsidiaries of Toshiba Corporation and ITOCHU Corporation each
contributed $500 million of cash (the "TWE Capitalization"). In
connection with the TWE Capitalization, the securities of QVC held
of record by ATC, Warner Cable and WCI, as successor-by-merger to
Investors, were transferred to TWE. On September 30, 1992, in
connection with a corporate restructuring, Time Warner transferred
to its wholly owned subsidiary, TWE Holdings Inc., the stock
ownership it had previously held in ATC and WCI. (TWE Holdings Inc.
was subsequently liquidated by merger into Time Warner on October
13, 1993).
EXERCISE OF NEW QVC WARRANTS AND SALE OF SHARES OF QVC
COMMON STOCK
On December 23, 1992, QVC extended an offer to all holders of
the New QVC Warrants ("Warrantholders"), including TWE and Paragon,
to convert any or all of the outstanding New QVC Warrants to shares
of QVC Common Stock. Pursuant to the terms of such offer, QVC
offered, at the Warrantholder's election, (i) to issue to the
Warrantholder, in exchange for the Warrantholder' s New QVC
Warrants, shares of QVC Common Stock with an aggregate value (each
share being valued at $37.75 per share (the "Conversion Price"))
equal to the difference between the Conversion Price and the New
QVC Warrant exercise price of $15.125 per share (the "Exercise Price"),
multiplied by the number of shares of QVC Common Stock into which
the QVC Warrants were exercisable, or (ii) if the Warrantholder
elected to exercise its New QVC Warrants by making payment of the
Exercise Price in cash and delivery of the warrant certificate, to
issue the number of shares of QVC Common Stock into which such New
QVC Warrants were exercisable and repurchase from such
Warrantholder, at the Conversion Price, all of the shares of QVC
Common Stock that could be purchased using all of the proceeds of
the payment by the Warrantholder of the Exercise Price.
Each of TWE and Paragon accepted the offer as described in
clause (ii) of the preceding paragraph and, pursuant thereto, on
December 31, 1992:
(a) TWE acquired 1,766,316 shares of QVC Common Stock
through the exercise of a like number of New QVC Warrants at a
total purchase price of $26,716,530, and, concurrently therewith,
TWE sold to QVC 707,696 shares of QVC Common Stock at a per share
price of $37.75, or a total sale price of $26,715,524; and
(b) Paragon acquired 270,958 shares of QVC Common Stock
through the exercise of a like number of New QVC Warrants at a
total purchase price of $4,098,239.75 and, concurrently therewith,
Paragon sold to QVC 108,563 shares of QVC Common Stock at a per
share price of $37.75, or a total sale price of $4,098,253.25.
Each of TWE and Paragon used working capital to purchase the
shares of QVC Common Stock described in the preceding paragraph.
In connection with a restructuring to conform to legal
requirements of a new investor and in contemplation of the
conversion described below, on September 14, 1993, TWE transferred
all of the QVC Common Stock, QVC Series B Preferred Stock and QVC
Series C Preferred Stock beneficially owned by it, through several
intermediary Time Warner majority owned entities, such that 18,885
shares of QVC Common Stock, 37 shares of QVC Series B Preferred
Stock and 1,735 shares of QVC Series C Preferred Stock were
transferred to TWQ II Co., a New York general partnership (the "TWQ
II Transfer") and 1,869,642 shares of QVC Common Stock, 3,711
shares of QVC Series B Preferred Stock and 171,765 shares of QVC
Series C Preferred Stock were transferred to TWQ I (the "TWQ I
Transfer"). These transfers were made as part of the initial
capitalization of TWQ I and TWQ II and no consideration was paid by
TWQ I for the TWQ I Transfer or by TWQ II for the TWQ II Transfer.
CONVERSION OF QVC SERIES B PREFERRED STOCK AND QVC
SERIES C PREFERRED STOCK
On September 15, 1993, in conjunction with and as part of the
corporate restructuring referred to above, TWQ I and TWQ II each
elected to convert each share of the QVC Series B Preferred Stock
and each share of the QVC Series C Preferred Stock assigned to it
by TWE at the rate of 10 shares of Common Stock for each share of
QVC Series B Preferred Stock and QVC Series C Preferred Stock,
respectively. Accordingly, TWQ I received 1,754,760 shares of QVC
Common Stock and TWQ II received 17,720 shares of QVC Common Stock
as a result of the conversion.
Item 4. PURPOSE OF TRANSACTION.
Upon consummation of the QVC Merger, the equity interest in
CVN of its shareholders and the interest in CVN of its
warrantholders ceased and CVN became a wholly owned subsidiary of
QVC. Accordingly, the transactions described in Item 3 pursuant to
the QVC Merger were effectuated in order to maintain the indirect
investment of Time Warner and WCI in QVC as successor to CVN.
The transfers of securities of QVC to other majority owned
subsidiaries of Time Warner as described in Item 3 were effectuated
by Time Warner in connection with various restructuring
transactions.
The Reporting Persons received a letter from QVC, dated
August 11, 1994, relating to the tender offer made by QVC
Programming Holdings, Inc., a Delaware corporation (the
"Purchaser"), to be wholly owned by Comcast Corporation and Liberty
Media Corporation, to purchase all outstanding shares of QVC Common
Stock at a price of $46 per share and all outstanding shares of QVC
Preferred Stock at a price of $460 per share, in each case net to
the seller in cash upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated August 11, 1994, and in the
related letter of transmittal (the "Offer"). The Offer will expire
on September 8, 1994, unless extended.
On September 1, 1994, the 3,624,402 shares of QVC Common Stock
owned by TWQ I and the 36,605 shares of QVC Common Stock owned by
TWQ II were tendered to the Purchaser pursuant to the Offer. On
September 1, 1994, the 188,711 shares of QVC Common Stock and the
21,250 shares of QVC Preferred Stock owned by Paragon were tendered
to the Purchaser pursuant to the Offer. As a result, upon
acceptance of the shares of QVC Common Stock and QVC Preferred
Stock described in this paragraph tendered pursuant to the Offer,
the Reporting Persons will cease to be beneficial holders of any
QVC securities.
Except as described in this Item 4, neither Time Warner nor
TWQ I has any current plans or proposals that relate to or would
result in (i) the acquisition or disposition of securities of QVC;
(ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving QVC or any of its
subsidiaries; (iii) a sale or transfer of a material amount of
assets of QVC or any of its subsidiaries; (iv) any change in the
present board of directors or management of QVC, including any
current plans or proposals to change the number of term of
directors or to fill any existing vacancies of the board of
directors of QVC; (v) any material change in the present
capitalization or dividend policy of QVC; (vi) any other material
change in QVC's business or corporate structure; (vii) changes in
QVC's charter, by-laws or instruments corresponding thereto or
other actions which may impede the acquisition of control of QVC by
any person; (viii) causing a class of securities of QVC to be
delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (ix) causing a class of
equity securities of QVC to become eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or
(x) any action similar to any of those enumerated in clauses (i)
through (ix) of this sentence.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
Prior to the tender offer for QVC Common Stock as described in
Item 4, TWQ I held 3,624,402 shares of QVC Common Stock and TWQ II
held 36,605 shares of QVC Common Stock. ATC is an indirect 50%
partner in Paragon which was the beneficial owner 188,711 shares of
QVC Common Stock and 21,250 shares of QVC Series C Preferred Stock.
Time Warner through TWQ I, TWQ II and ATC was deemed to be a
beneficial holder of such shares within the meaning of Rule 13d-
3(d)(1)(i) under the Exchange Act. As reported in Amendment No. 1
to the Schedule 14D-9 of QVC, dated August 11, 1994, QVC had
40,265,392 shares of QVC Common Stock outstanding as of July 31,
1994. In accordance with the provisions of Rule 13(d)(1)(i) under
the Exchange Act, an aggregate of 4,062,218 shares of QVC Common
Stock beneficially owned by Time Warner constitutes approximately
10.0% of the outstanding shares of QVC Common Stock.
The shares of QVC Common Stock owned by TWQ I represent in the
aggregate approximately 9.0% of the outstanding shares of QVC
Common Stock. TWQ I has the sole power to vote and dispose of the
shares of QVC Common Stock registered in its name. Time Warner may
be deemed to have shared power to direct the voting and the
disposition of the QVC Common Stock owned by TWQ I.
The shares of QVC Common Stock owned by TWQ II represents less
than one-tenth of one percent of the outstanding shares of QVC
Common Stock. TWQ II has the sole power to vote and dispose of the
shares of QVC Common Stock registered in its name. Time Warner may
be deemed to have shared power to direct the voting and the
disposition of the shares of QVC Common Stock owned by TWQ II.
The shares of QVC Common Stock owned by Paragon represent in
the aggregate approximately 0.5% of the outstanding shares of QVC
Common Stock.
The principal business address of Paragon is: 800 Gessner,
Suite 700, Houston, Texas 77024. The three general partners of
Paragon are: (1) ATC Holdings II, Inc., a Delaware corporation and
a direct wholly owned subsidiary of ATC ("ATCH"), a 31.0915%
general partner; (2) ARP 113, Inc., a Delaware corporation and a
wholly owned subsidiary of ATCH ("ARP"), a 18.9085% general
partner; and (3) KBL Communications, Inc. ("KBL"), a Texas
corporation and an indirect wholly owned subsidiary of Houston
Industries Incorporated ("Houston"), a 50% general partner.
Houston is a holding company consisting primarily of energy and
cable system companies. Each of KBL, ATCH and ARP owns and manages
cable television systems. The address of the principal office of
Houston and KBL is 800 Gessner, Suite 700, Houston, Texas 77024.
The address of the principal office of ATCH and ARP is 300 First
Stamford Place, Stamford, Connecticut 06902.
Pursuant to an Amended and Restated General Partnership
Agreement dated as of June 17, 1987 among ATCH and ARP and KBL (the
"Paragon Agreement"), ATC (through ATCH and ARP) shares with KBL
and Houston the power to direct the vote and the disposition of the
shares of QVC Common Stock and QVC Series C Preferred Stock that
are owned by Paragon. Time Warner, as the parent of ATC, may be
deemed to have shared power to direct the voting and the
disposition of the shares of QVC Common Stock and QVC Series C
Preferred Stock owned by Paragon.
As set forth in Item 4, in response to the Offer, TWQ I
tendered 3,624,402 shares of QVC Common Stock at a price of $46 per
share and upon acceptance for payment will receive $166,722,492 and
TWQ II tendered 36,605 shares of QVC Common Stock at a price of $46
per share and upon acceptance for payment will receive $1,683,830.
Paragon, upon acceptance for payment of the 188,711 shares of QVC
Common Stock tendered pursuant to the Offer at a price of $46 per
share, will receive $8,680,706 and, upon acceptance for payment of
the 21,250 shares of QVC Series C Preferred Stock tendered pursuant
to the Offer, will receive $9,775,000. The shares were tendered on
September 1, 1994 to The Bank of New York, as Depositary, pursuant
to the terms of the Letter of Transmittal.
Beverly Sills Greenough, a director of Time Warner, held 400
shares of QVC Common Stock for investment. Except as otherwise
described herein, neither Time Warner nor TWQ I, is aware of any
beneficial ownership of, or any transaction within 60 days before
the filing of this Statement in any shares of QVC Common Stock by
Time Warner or TWQ I or any person listed on Annex A.
Item (d) is not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERTAKINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
As set forth in Item 3, in connection with the QVC Merger,
each of ATC, Paragon and Warner Cable entered into an Equity
Participation Agreement and Addendum to its CVN Affiliation
Agreement. The terms of such agreements are similar with respect
to ATC, Paragon and Warner Cable.
Pursuant to the Paragon Agreement, Paragon's Management
Committee generally controls the voting and the disposition of
investments held by the partnership, including securities
beneficially owned by Paragon. Paragon's Management Committee is
composed of six members, three selected by KBL and three selected
by the ATC-affiliated partners. Action of the Management Committee
requires a written consent of a majority of its members or the
affirmative vote of a majority of a quorum (comprised of one KBL
member and one ATC member).
Recontribution Agreements dated as of September 14, 1993, by
and between TWE and TWQ I and TWQ II, respectively, each provide
for the recontribution to TWE on September 15, 1995, of the shares
of QVC Common Stock transferred by TWE to TWQ I and TWQ II on
September 14, 1993 to the extent such shares are then owned by TWQ
I or TWQ II, as the case may be. The transfer shall only include
those shares TWE is no longer prohibited from owning as a result of
restrictions imposed by the Modification of Final Judgment entered
on August 24, 1982 by the United States District Court for the
District of Columbia.
A summary of the voting rights and conversion rights of the
QVC Series C Preferred Stock is set forth below:
(1) VOTING RIGHTS. Except for the two directors to be
elected by the holders of QVC Common Stock and the one director to
be elected by the holders of QVC Series B Preferred Stock, holders
of QVC Series C Preferred Stock, along with holders of other shares
of capital stock of QVC, shall be entitled to cast one vote per
share for the election of the remaining directors. Except for the
election of directors as described above, the holders of QVC Series
C Preferred Stock shall have one vote per share for all other votes
to be taken by the shareholders of QVC.
(2) CONVERSION RIGHTS. Each share of QVC Series C
Preferred Stock shall be convertible into ten shares of QVC Common
Stock on or after the earlier of (i) two years after such shares
are issued, or (ii) the closing price for QVC Common Stock has
equalled or exceeded $20.00 per share (adjusted to take account of
any stock splits, stock dividends, recapitalizations or other
transactions effected without the payment of consideration to QVC)
for at least 20 consecutive days during which the NASDAQ National
Market System, the national stock exchange or the quotation system
on which QVC Common Stock is listed was open or operating.
Except as described in Item 4 hereto and in this Item 6, there
are no contracts, arrangements, understandings or relationships
(legal or otherwise) on the part of Time Warner or TWQ I, or to the
best of their knowledge, on the part of their respective executive
officers or directors or between such persons or any person with
respect to the securities of QVC.
Item 7. MATERIALS TO BE FILED AS EXHIBITS.
The exhibits listed on the accompanying Exhibit Index are
filed or incorporated by reference as part of this Statement and
such Exhibit Index is incorporated herein by reference.<PAGE>
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the knowledge and
belief of the undersigned, the undersigned certify that the
information set forth in this statement is true, complete and
correct.
Dated: September 1, 1994 TIME WARNER INC.
By:/s/ Spencer B. Hays
Name: Spencer B. Hays
Title: Vice President
TWQ I CO., L.P.
By: Warner Communications Inc.,
its General Partner
By:/s/ Spencer B. Hays
Name: Spencer B. Hays
Title: Vice President<PAGE>
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
1 Joint Filing Agreement.
2 Equity Participation Agreement and the
Addendum to the CVN Affiliation
Agreement among QVC and ATC dated
October 26, 1989 (which is incorporated
herein by reference to Exhibit 2 to the
Schedule 13D of Time Warner et al.
dated November 29, 1989 (the "Nov. 89 13D")).
3 Equity Participation Agreement and the
Addendum to the CVN Affiliation
Agreement among QVC and Warner
Cable dated October 27, 1989 (which is
incorporated herein by reference to
Exhibit 3 to the Nov. 89 13D).
4 Form of the QVC Common Stock Purchase
Warrant (which is incorporated herein
by reference to Exhibit 4 to the
Nov. 89 13D).
5 Standby Equity Agreement dated as of
April 30, 1991, among QVC, Comcast
Financial Corporation, Liberty Program
Investments, Inc. and Investors (which
is incorporated herein by reference to
Exhibit 6 to Amendment No. 1 dated
January 28, 1993 to the Nov. 89 13D
("Amendment No. 1 to Nov. 89 13D")).
6 Letter dated December 23, 1992 between
QVC and Time Warner (which is
incorporated herein by reference to
Exhibit 7 to Amendment No. 1 to Nov. 89 13D).
7 Letter dated December 23, 1992 between
QVC and Paragon (which is incorporated
herein by reference to Exhibit 8 to
Amendment No. 1 to Nov. 89 13D).
8 TWQ I Co., L.P. Recontribution
Agreement (which is incorporated herein
by reference to Exhibit 10 to Amendment
No. 2 dated September 30, 1993 to the
Nov. 89 13D ("Amendment No. 2 to Nov. 89 13D")).
9 TWQ II Co. Recontribution Agreement
(which is incorporated herein by
reference to Exhibit 11 to Amendment
No. 2 to Nov. 89 13D).<PAGE>
<PAGE>
EXHIBIT 1
JOINT FILING AGREEMENT
Time Warner Inc. and TWQ I Co., L.P. hereby agree, in
accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, that the Statement on Schedule 13D filed
herewith, and any amendments thereto, relating to shares of Common
Stock, $0.01 par value, of QVC Network, Inc., is, and will be,
filed jointly on behalf of each such person.
Dated: September 1, 1994
TIME WARNER INC.
By:/s/ Spencer B. Hays
Name: Spencer B. Hays
Title: Vice President
TWQ I CO., L.P.
By: Warner Communications Inc.,
its General Partner
By: /s/ Spencer B. Hays
Name: Spencer B. Hays
Title: Vice President<PAGE>
<PAGE>
ANNEX A
The following is a list of the directors and executive
officers of Time Warner Inc. ("Time Warner"), setting forth the
business address and present principal occupation or employment
(and the name, principal business and address of any corporation or
organization in which such employment is conducted) of each such
person. To the best knowledge of Time Warner, each person is a
citizen of the United States of America.
Principal Occupation or
NAME OFFICE EMPLOYMENT AND ADDRESS
Merv Adelson Director Chairman, East-West Capital
Associates
11111 Santa Monica Blvd.
Los Angeles, CA 90025
(private investment
company)
Timothy A. Boggs Senior Vice Senior Vice President
President Time Warner*
800 Connecticut Avenue, NW,
Suite 800
Washington, DC 20006
Lawrence B. Director Partner,
Buttenwieser Rosenman & Colin
575 Madison Avenue
New York, NY 10022
(attorney)
Edward S. Director Chairman,
Finkelstein Finkelstein
Associates Inc.
712 Fifth Avenue
New York, NY 10019
(consulting)
Beverly Sills Director Chairman-Elect, Lincoln
Greenough Center for the
Performing Arts
211 Central Park West
New York, NY 10024
(entertainment)
David R. Haas Senior Vice Senior Vice President
President and and Controller,
Controller Time Warner*
Peter R. Haje Executive Executive Vice
Vice President, Secretary
President, and General Counsel,
Secretary Time Warner*
and General
Counsel
Carla A. Hills Director Chairman and Chief
Executive Officer,
Hills & Company
1200 19th Street, NW
Washington, DC 20036
(international trade
consultants)
Geoffrey W. Senior Vice Senior Vice President,
Holmes President Time Warner*
Tod R. Hullin Senior Vice Senior Vice President,
President Time Warner*
David T. Kearns Director Senior University Fellow,
Harvard University,
Graduate School of
Education
Appian Way
Gutman Library
Cambridge, MA 02138
Gerald M. Levin Director, Chairman, Chief
Chairman, Executive Officer
Chief and President,
Executive Time Warner*
Officer
and President
Philip R. Senior Vice Senior Vice President
Lochner, Jr. President Time Warner*
Henry Luce, III Director Chairman and Chief
Executive Officer,
The Henry Luce
Foundation, Inc.
720 Fifth Avenue
New York, NY 10019
(private foundation)
Reuben Mark Director Chairman and Chief
Executive Officer,
Colgate-Palmolive Company
300 Park Avenue
New York, NY 10022
J. Richard Munro Director Chairman of the Executive
Committee, Time Warner*
Richard D. Director Chairman and Chief
Parsons Executive Officer,
Dime Savings Bank
589 Fifth Avenue
New York, NY 10017
(banking)
Donald S. Perkins Director Former Chairman,
Jewel Companies Inc.
Suite 2700
One First National Plaza
Chicago, IL 60603
(retailing)
Raymond S. Troubh Director Financial Consultant and
Director of Various
Companies,
10 Rockefeller Plaza
New York, NY 10020
(financial consultant)
Bert W. Wasserman Executive Executive Vice President
Vice and Chief Financial
President Officer
and Chief Time Warner*
Financial
Officer
Francis T. Director Former Commissioner of
Vincent, Jr. Major League Baseball,
c/o Peter J. Solomon Company
350 Park Avenue
New York, NY 10022
____________________
*The business address of Time Warner is 75 Rockefeller Plaza, New
York, NY 10019.
