SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
Amendment No. 15
to
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
___________________
QVC, INC.
(Name of Subject Company)
QVC, INC.
(Name of Person(s) Filing Statement)
Common Stock, par value $.01 Per Share
Series B Preferred Stock, par value $.10 Per Share
Series C Preferred Stock, par value $.10 Per Share
(Title of Class of Securities)
747262 10 3
(only with respect to the Common Stock)
(CUSIP Number of Class of Securities)
___________________
Neal S. Grabell, Esq.
Senior Vice President, General Counsel and Secretary
QVC, Inc.
1365 Enterprise Drive
West Chester, Pennsylvania 19380
(610) 701-1000
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person(s) filing statement)
___________________
With a copy to:
Pamela S. Seymon, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000
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This Statement amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 of QVC,
Inc., a Delaware corporation, filed with the Securities and
Exchange Commission on August 11, 1994, as previously amended
and supplemented (the "Schedule 14D-9"), with respect to the
tender offer made by QVC Programming Holdings, Inc., a Delaware
corporation to be wholly owned by Comcast Corporation, a Penn-
sylvania corporation, and Liberty Media Corporation, a Delaware
corporation and a wholly-owned subsidiary of Tele-Communica-
tions, Inc., a Delaware corporation (collectively, the "Bid-
ders"), to purchase all outstanding Shares at a price of $46
per Common Share and $460 per Preferred Share, 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 August 11, 1994 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto, dated February 3, 1995
(the "Supplement"), and the related Letters of Transmittal
(which constitute the "Offer"), which were annexed to and filed
with the Schedule 14D-9 as Exhibits 1, 14, 2 and 15, respec-
tively, as amended and supplemented by filings with the Com-
mission on Schedule 14D-1 by the Bidders (as described herein
or therein).
Capitalized terms used and not defined herein shall
have the meanings assigned such terms in the Schedule 14D-9.
Item 3. Identity and Background.
(b) The information set forth under Item 3(b)(i)
("Certain Arrangements with Comcast, Liberty and the Pur-
chaser"), Item 3(b)(ii) ("Contacts between the Company and the
Parent Purchasers") and Item 3(b)(iii) ("Certain Agreements
relating to the Company and the Offer") of the Schedule 14D-9
is hereby amended and supplemented to include the information
set forth in the Supplement under "Introduction," "Financing of
the Transaction -- Bank Financing," "-- QVC Bridge Loan," "--
Subordinated Debt Financing" and by the information set forth
below.
QVC Bridge Loan. In connection with the financing of
the Offer, the Board of Directors of the Company has authorized
the Company, subject to the negotiation and execution of de-
finitive documentation and the satisfaction of the officers of
the Company with the other relevant terms and conditions of
such loan, to make a loan (the "Company Loan") to the Purchaser
of up to $60 million. In addition, the Company would be per-
mitted to increase the loan by up to an additional $266 mil-
lion, which is approximately equal to the difference between
the Purchaser's aggregate costs of financing the Offer and the
Purchaser's net acquisition costs to consummate the Offer and
the Merger. The increased amount of the loan would be funded
from proceeds to be received by the Company from the exercise
of QVC Stock Options prior to the closing of the Offer. It is
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anticipated that the loan will only be drawn down by the Pur-
chaser to the extent that the Offer and the Merger are not
consummated on the same day. The Company Loan will have a term
of two months and will bear interest at the Prime Rate (to be
defined) plus 2.00% per annum, payable at maturity. The Com-
pany Loan will be conditioned upon the Offer expiring no later
than 12:00 Midnight, New York City time, on Thursday, February
9, 1995, the time at which the Offer is currently scheduled to
expire. The Company Loan will be unsecured and subordinated to
the Tender Offer Facility. The Company Loan will be drawn down
in one or more installments and only after $1.1 billion of bank
financing (all available bank financing), not reduced by any
fees or holdback, and all capital contributions are used to
purchase Shares tendered in the Offer.
In addition, the Company will fund a "rabbi" trust
for outstanding Options not exercised in connection with the
Offer; however, the amount of such funding will reduce the
maximum amount of the Company Loan. See "Certain Agreements
relating to the Company and the Offer -- The Merger Agreement"
in the Schedule 14D-9 as amended.
A copy of the term sheet is filed as Exhibit 16 to
the Schedule 14D-9, which is incorporated herein by reference,
and the foregoing summary description of the Company Loan is
qualified in its entirety by reference to such exhibit.
The parties to the Merger Agreement (as defined in
the Schedule 14D-9) have amended the Merger Agreement by a
First Amendment to the Agreement and Plan of Merger, dated as
of February 3, 1995 (the "First Amendment"), to change the
structure of the Merger so that the Purchaser, rather than a
wholly-owned subsidiary of the Purchaser, will be merged with
and into the Company (the "Merger" and, together with the
Offer, the "Transaction"). After the Merger, the Company would
continue as the Surviving Corporation.
The First Amendment also provides that (i) the
Company, rather than the Purchaser, will fund the "rabbi" trust
referred to under "QVC Bridge Loan" above, (ii) the Company is
authorized to draw cash funds from the "rabbi" trust for the
purpose of repurchasing any outstanding QVC Stock Options for a
price equal to the difference between $46 per share and the per
share exercise price of such QVC Stock Options at any time
after consummation of the Offer, which the Company is permitted
to do, (iii) the Company may accelerate the vesting of any
outstanding QVC Stock Option, and (iv) the Company is permitted
to make the Company Loan.
A copy of the First Amendment is filed as Exhibit 17
to the Schedule 14D-9, which is incorporated herein by
reference, and the foregoing summary description is qualified
in its entirety by reference to such exhibit.
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In connection with the First Amendment, the Executive
Compensation Committee of the Board of Directors of the Company
has authorized the acceleration of vesting of certain
outstanding QVC Stock Options held by certain executive
officers and directors of the Company pursuant to the appli-
cable employee stock option plans. In addition, the Board of
Directors of the Company has authorized the Company, following
the closing of the Offer, to offer to repurchase any outstand-
ing QVC Stock Options at any time after consummation of the
Offer for a price equal to the excess of $46 per share over the
per share exercise price of each such QVC Stock Option.
Item 8. Additional Information to be Furnished.
The information set forth in Item 8 of the Schedule
14D-9 is hereby amended and supplemented by the information set
forth in the Supplement, filed as Exhibit 14 to the Schedule
14D-9 and incorporated herein by reference, and by the
information set forth below.
According to information contained in Amendment No.
16 to the Schedule 14D-1, filed with the Commission by the
Parent Purchasers and the Purchaser on February 3, 1995, the
Supplement, dated February 3, 1995, Amendment No. 17 to the
Schedule 14D-1, filed with the Commission by the Parent Pur-
chasers and the Purchaser on February 6, 1995, and the Comcast/
TCI press release, dated February 3, 1995, filed as an exhibit
thereto, the Parent Purchasers have extended the expiration
date of the Offer to 12:00 Midnight, New York City time, on
Thursday, February 9, 1995. The Parent Purchasers have
disclosed that they are proceeding with their efforts to obtain
the financing necessary to satisfy the condition to the Offer
relating to financing, as discussed above under Item 3 and in
the Supplement, and, assuming all other conditions to the Offer
are satisfied, anticipate that such financing will be obtained
by February 9, 1995, the date on which the Offer is scheduled
to expire. According to the press release, the Parent
Purchasers have disclosed that they do not expect that the
Offer will be extended beyond 12:00 Midnight, New York City
time, on Thursday, February 9, 1995. The Offer continues to be
conditioned upon, among other things, the Parent Purchasers'
obtaining sufficient financing to purchase all Shares tendered
pursuant to the Offer, to consummate the Merger and to pay
related fees and expenses.
The foregoing summary description is qualified in its
entirety by reference to Amendment No. 16 to the Schedule 14D-
1, the Supplement, Amendment No. 17 to the Schedule 14D-1 and
the Comcast/TCI press release filed as an exhibit thereto.
The information set forth under Item 8(d) of the
Schedule 14D-9 ("Antitrust") is hereby amended by adding the
following information.
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By letter dated February 3, 1995, the FTC advised the
Company that the FTC had closed its investigation with respect
to the Offer and Merger. The FTC reserved its right to take
such further action as the public interest may require.
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Item 9. Material to be Filed as Exhibits.
Exhibit 1** -- Offer to Purchase, dated August 11,
1994.
Exhibit 2** -- Letter of Transmittal.
Exhibit 3** -- Proxy Statement, dated May 31, 1994
relating to QVC, Inc.'s 1994 Annual
Meeting of Stockholders.
Exhibit 4** -- Agreement and Plan of Merger, dated as
of August 4, 1994, among QVC, Inc.,
Comcast Corporation, Liberty Media
Corporation and Comcast QMerger, Inc.
(now known as QVC Programming Hold-
ings, Inc.).
Exhibit 5** -- Letter Agreement, dated as of August
4, 1994, among Comcast Corporation,
Barry Diller and Arrow Investments,
L.P.
Exhibit 6** -- Letter Agreement, dated as of August
4, 1994, among Comcast Corporation,
Liberty Media Corporation and Tele-
Communications, Inc.
Exhibit 7** -- Letter to Stockholders of QVC, Inc.,
dated August 11, 1994.*
Exhibit 8** -- Press Release issued by QVC, Inc.,
Comcast Corporation and Liberty Media
Corporation on August 5, 1994.
Exhibit 9** -- Opinion of Allen & Company Incorpo-
rated, dated August 4, 1994.*
Exhibit 10** -- Report of Allen & Company Incorporated
to the Board of Directors of QVC,
Inc., dated August 4, 1994.
Exhibit 11** -- Engagement Letter, dated August 4,
1994, between QVC, Inc. and Allen &
Company Incorporated (including the
related Indemnity Letter).
* Included with Schedule 14D-9 mailed to Stockholders.
** Previously filed.
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Exhibit 12** -- Press release issued by QVC, Inc. and
Comcast Corporation on August 25,
1994.
Exhibit 13** -- Letter Agreement, dated as of October
13, 1994, by and among TCI Cable In-
vestments, Inc., Liberty Media Cor-
poration, Tele-Communications, Inc.
and Comcast Corporation.
Exhibit 14 -- Supplement to Offer to Purchase, dated
February 3, 1995.
Exhibit 15 -- Revised Letter of Transmittal.
Exhibit 16 -- Term Sheet in connection with QVC
Bridge Loan to the Purchaser.
Exhibit 17 -- First Amendment, dated as of February
3, 1995, to Agreement and Plan of
Merger
** Previously filed.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge
and belief, the undersigned certifies that the information set
forth in this statement is true, complete and correct.
QVC, INC.
Dated: February 9, 1995 By: /s/ Neal S. Grabell
Neal S. Grabell
Senior Vice President,
General Counsel & Secretary
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EXHIBIT INDEX
Exhibit No. Description Page No.
Exhibit 1** -- Offer to Purchase, dated August 11,
1994. ..................................
Exhibit 2** -- Letter of Transmittal...................
Exhibit 3** -- Proxy Statement dated May 31, 1994
relating to QVC, Inc.'s 1994 Annual
Meeting of Stockholders.................
Exhibit 4** -- Agreement and Plan of Merger, dated
as of August 4, 1994, among QVC, Inc.,
Comcast Corporation, Liberty Media
Corporation and Comcast QMerger,
Inc. (now known as QVC Programming
Holdings, Inc.).........................
Exhibit 5** -- Letter Agreement, dated as of August
4, 1994, among Comcast Corporation,
Barry Diller and Arrow Investments,
L.P.....................................
Exhibit 6** -- Letter Agreement, dated as of August 4,
1994, among Comcast Corporation, Lib-
erty Media Corporation and TeleCom-
munications, Inc........................
Exhibit 7** -- Letter to Stockholders of QVC, Inc.
dated August 11, 1994.*.................
Exhibit 8** -- Press Release issued by QVC, Inc.,
Comcast Corporation and Liberty Media
Corporation on August 5, 1994...........
Exhibit 9** -- Opinion of Allen & Company Incorpo-
rated dated August 4, 1994.*............
Exhibit 10** -- Report of Allen & Company Incorporated
to the Board of Directors of QVC, Inc.
dated August 4, 1994....................
Exhibit 11** -- Engagement Letter, dated August 4, 1994,
between QVC, Inc. and Allen & Company
Incorporated (including the related
Indemnity Letter).......................
* Included with Schedule 14D-9 mailed to Stockholders.
** Previously filed.
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Exhibit 12** -- Press release issued by QVC, Inc. and Comcast
Corporation on August 25, 1994..........
Exhibit 13** -- Letter Agreement, dated as of October 13, 1994,
by and among TCI Cable Investments, Inc., Liberty
Media Corporation, Tele-Communications, Inc. and
Comcast Corporation.....................
Exhibit 14 -- Supplement to Offer to Purchase, dated February
3, 1995.
Exhibit 15 -- Revised Letter of Transmittal.
Exhibit 16 -- Term Sheet in connection with QVC Bridge Loan to
the Purchaser.
Exhibit 17 -- First Amendment, dated as of February 3, 1995, to
Agreement and Plan of Merger
** Previously filed.
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EXHIBIT 14
Supplement to Offer to Purchase for Cash
All Outstanding Shares of Common Stock,
Series B Preferred Stock and
Series C Preferred Stock
of
QVC, INC.
at
$46 Net Per Share of Common Stock and
$460 Net Per Share of Preferred Stock
by
QVC PROGRAMMING HOLDINGS, INC.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, FEBRUARY 9, 1995, UNLESS THE OFFER
IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS,
(i) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION DATE SHARES (THE "SHARES") OF COMMON STOCK, PAR
VALUE $.01 PER SHARE (THE "COMMON STOCK"), AND SERIES B PRE-
FERRED STOCK AND SERIES C PREFERRED STOCK, EACH PAR VALUE $.10
PER SHARE (TOGETHER, THE "PREFERRED STOCK") OF QVC, INC. (THE
"COMPANY") WHICH, TOGETHER WITH THE 19,176,061 FULLY DILUTED
SHARES AGREED TO BE CONTRIBUTED BY COMCAST CORPORATION
("COMCAST") AND LIBERTY MEDIA CORPORATION ("LIBERTY") (OR ANY
WHOLLY-OWNED SUBSIDIARY THEREOF) TO QVC PROGRAMMING HOLDINGS,
INC. (THE "PURCHASER"), PURSUANT TO THE JOINT BIDDING AGREEMENT
(AS DEFINED IN THE OFFER TO PURCHASE DATED AUGUST 11, 1994 (THE
"OFFER TO PURCHASE")), REPRESENT AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES OF COMMON STOCK, CALCULATED ON A FULLY DI-
LUTED BASIS AND (ii) THE PURCHASER HAVING OBTAINED SUFFICIENT
FINANCING ON TERMS SATISFACTORY TO IT TO PURCHASE ALL OF THE
OUTSTANDING SHARES PURSUANT TO THE OFFER, CONSUMMATE THE MERGER
(AS DESCRIBED IN THE OFFER TO PURCHASE) AND PAY RELATED FEES
AND EXPENSES. SEE "THE TENDER OFFER -- 10. CERTAIN CONDITIONS
OF THE OFFER" IN THE OFFER TO PURCHASE, AS AMENDED.
THE BOARD OF DIRECTORS OF THE COMPANY (OTHER THAN
DIRECTORS AFFILIATED WITH COMCAST) HAS UNANIMOUSLY DETERMINED
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THAT THE OFFER AND THE MERGER DESCRIBED IN THE OFFER TO PUR-
CHASE ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S
STOCKHOLDERS (OTHER THAN COMCAST AND LIBERTY AND THEIR AF-
FILIATES) AND APPROVED THE OFFER AND THE MERGER, AND RECOMMENDS
THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND APPROVE
THE MERGER.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMIS-
SION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR
UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
IMPORTANT
Any stockholder desiring to tender Shares should
either (1) complete and sign one of the Letters of Transmittal
(or facsimile thereof) in accordance with the instructions in
one of the Letters of Transmittal and deliver it with the
certificate(s) representing tendered Shares and all other
required documents to the Depositary or tender such Shares
pursuant to the procedures for book-entry transfer set forth in
"The Tender Offer -- 3. Procedures for Tendering Shares" in
the Offer to Purchase, as amended, or (2) request his or her
broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for him or her. A stockholder having
Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such person
if he or she desires to tender such Shares.
Any stockholder who desires to tender Shares and
whose certificates representing such Shares are not immediately
available or who cannot comply with the procedures for book-
entry transfer on a timely basis may tender such Shares pur-
suant to the guaranteed delivery procedures set forth in "The
Tender Offer -- 3. Procedures for Tendering Shares" in the
Offer to Purchase, as amended.
Questions and requests for assistance or additional
copies of this Supplement to Offer to Purchase ("Supplement"),
the Offer to Purchase and the Letters of Transmittal may be
directed to the Information Agent or the Dealer Manager at
their respective addresses and telephone numbers set forth on
the last page of this Supplement. Additional copies of this
Supplement, the Letters of Transmittal and the Notice of
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Guaranteed Delivery may also be obtained from brokers, dealers,
commercial banks or trust companies.
The Dealer Manager for the Offer is:
Lazard Freres & Co.
February 3, 1995
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To the Holders of Common Stock,
Series B Preferred Stock and
Series C Preferred Stock of
QVC, Inc.:
INTRODUCTION
The following information amends and supplements the
Offer to Purchase, dated August 11, 1994 (the "Offer to Pur-
chase"), of QVC Programming Holdings, Inc., a Delaware corpo-
ration (the "Purchaser"). The Purchaser, which will be wholly-
owned by Comcast Corporation, a Pennsylvania corporation
("Comcast"), and Liberty Media Corporation, a Delaware corpo-
ration ("Liberty" and, together with Comcast, the "Parent
Purchasers") and a wholly-owned subsidiary of Tele-
Communications, Inc., a Delaware corporation ("TCI"), hereby
offers to purchase all outstanding shares (the "Shares") of
Common Stock, $.01 par value per share (the "Common Stock"),
and Series B Preferred Stock and Series C Preferred Stock, each
par value $.10 per share (together, the "Preferred Stock") of
QVC, Inc., a Delaware corporation (the "Company") at $46 per
share of Common Stock and $460 per share of Preferred Stock,
net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to
Purchase, this Supplement and in the related Letters of
Transmittal (which, together with the amendments thereto,
constitute the "Offer"). Tendering stockholders will not be
obligated to pay brokerage fees or commissions or, except as
set forth in Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the purchase of Shares pursuant to the Offer.
The Purchaser will pay all charges and expenses of Lazard
Freres & Co. (in such capacity, the "Dealer Manager"), the Bank
of New York (the "Depositary") and D.F. King & Co., Inc. (the
"Information Agent") incurred in connection with the Offer.
As indicated below, Comcast and Liberty are pro-
ceeding with their efforts to obtain the financing necessary to
satisfy the Financing Condition (as defined in the Offer to
Purchase, as amended) and anticipate that such financing will
be obtained by February 9, 1995, assuming all other conditions
to the Offer have been satisfied. Upon obtaining such financ-
ing, and if the other conditions to the Offer are then satis-
fied, Comcast and Liberty intend to cause the Purchaser to
accept Shares for payment and consummate the Offer.
Except as otherwise set forth in this Supplement, the
terms and conditions previously set forth in the Offer to
Purchase remain applicable in all respects to the Offer, and
this Supplement should be read in conjunction with the Offer to
Purchase. Unless the context requires otherwise, terms not
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defined herein have the meaning ascribed to them in the Offer
to Purchase.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS,
(i) THERE BEING VALIDLY TENDERED (AS DEFINED IN THE OFFER TO
PURCHASE) AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE OFFER TO PURCHASE) SHARES WHICH, TOGETHER WITH
THE 19,176,061 FULLY DILUTED SHARES AGREED TO BE CONTRIBUTED BY
THE PARENT PURCHASERS (OR ANY WHOLLY-OWNED SUBSIDIARY THEREOF)
TO THE PURCHASER PURSUANT TO THE JOINT BIDDING AGREEMENT
DESCRIBED IN THE OFFER TO PURCHASE, REPRESENT AT LEAST A
MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK, ON A FULLY
DILUTED BASIS (THE "MINIMUM TENDER CONDITION") AND (ii) THE
PURCHASER HAVING OBTAINED SUFFICIENT FINANCING ON TERMS SAT-
ISFACTORY TO IT TO PURCHASE ALL OF THE OUTSTANDING SHARES
PURSUANT TO THE OFFER, CONSUMMATE THE MERGER AND PAY RELATED
FEES AND EXPENSES (THE "FINANCING CONDITION"). SEE "THE TENDER
OFFER -- 10. CERTAIN CONDITIONS OF THE OFFER" IN THE OFFER TO
PURCHASE, AS AMENDED.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD")
(OTHER THAN DIRECTORS AFFILIATED WITH COMCAST) HAS UNANIMOUSLY
DETERMINED THAT THE OFFER AND THE MERGER DESCRIBED IN THE OFFER
TO PURCHASE ARE FAIR TO AND IN THE BEST INTERESTS OF THE COM-
PANY'S STOCKHOLDERS (OTHER THAN THE PARENT PURCHASERS AND THEIR
AFFILIATES) AND APPROVED THE OFFER AND THE MERGER AND RECOM-
MENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND
APPROVE THE MERGER.
ALLEN & COMPANY INCORPORATED ("ALLEN & COMPANY" OR
"ALLEN"), FINANCIAL ADVISOR TO THE COMPANY, HAS DELIVERED AN
OPINION TO THE BOARD TO THE EFFECT THAT THE CONSIDERATION TO BE
RECEIVED BY THE STOCKHOLDERS (OTHER THAN THE PARENT PURCHASERS)
OF THE COMPANY IN THE OFFER AND MERGER DESCRIBED IN THE OFFER
TO PURCHASE IS FAIR TO SUCH STOCKHOLDERS FROM A FINANCIAL POINT
OF VIEW. SEE "SPECIAL FACTORS -- OPINIONS AND REPORTS OF FI-
NANCIAL ADVISORS" IN THE OFFER TO PURCHASE, AS AMENDED.
According to the Company, as of January 31, 1995,
there were outstanding approximately 55,642,642 Fully Diluted
Shares. Subsequent to the Parent Contribution, the Purchaser
will beneficially own 19,176,061 Fully Diluted Shares. Ac-
cordingly, the Purchaser believes that the Minimum Tender
Condition will be satisfied if approximately 8,645,261 shares
of Common Stock are validly tendered pursuant to the Offer and
not withdrawn prior to the Expiration Date.
Stockholders are urged to read this Supplement, the
Offer to Purchase and the related Letters of Transmittal
carefully before deciding whether to tender their Shares.
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Stockholders are also urged to consult the Tender Offer
Statement on Schedule 14D-1 (as amended, the "Schedule 14D-1")
relating to the Offer, which is on public file with the Com-
mission and available for review.
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Financing of the Transaction
Bank Financing. In connection with the Offer, on
January 13, 1995, Comcast entered into a commitment letter
(together with the term sheets thereto, the "Commitment
Letter") with certain lenders (each, a "Managing Agent" and
collectively, the "Managing Agents"), pursuant to which the
Managing Agents have agreed, subject to the terms and condi-
tions set forth therein, to provide the Purchaser with a multi-
draw term loan credit facility in the aggregate principal
amount of $1,100,000,000 (later agreed to be increased to
$1,150,000,000) (the "Tender Offer Facility" and loans extended
thereunder, the "Tender Loans"), and to provide the Surviving
Corporation (as defined in the Offer to Purchase) with a credit
facility in the aggregate principal amount of $1,200,000,000
(the "Permanent Facility"). The proceeds of the Tender Offer
Facility (except, unless Comcast guarantees the payment of
interest and certain fees and other amounts under the Tender
Offer Facility, for a certain amount to be withheld, as shall
be determined by the Managing Agents to be sufficient to pay,
among other things, all interest and fees for three months from
the date of the initial Tender Loans) are available to be used
to finance the purchase of the Shares pursuant to the Offer.
The proceeds of the Permanent Facility are available to be used
to repay the Tender Offer Facility, to pay other amounts, in-
cluding merger consideration and transaction costs, payable in
connection with the Merger, to issue letters of credit and for
general corporate purposes.
The Tender Offer Facility and the Permanent Facility
will be provided pursuant to the terms of, and shall become
effective only upon the execution and delivery of, mutually
satisfactory definitive loan documentation incorporating terms
and conditions set forth in the Commitment Letter. It is
expected that the definitive documentation for the Tender Offer
Facility will not be executed until definitive documentation
for the Permanent Facility is substantially complete.
The credit agreement for the Tender Offer Facility
(the "Tender Facility Agreement") will be subject to certain
customary conditions precedent, including, without limitation,
the following: (1) the shareholders, management or other sim-
ilar agreement or agreements (the "Joint Ownership and Man-
agement Agreements") among Comcast, Liberty and certain of
their respective affiliates and the corporate and capital
structure and related documents and agreements of the Purchaser
and the Company shall be in form and substance reasonably
satisfactory to the Managing Agents; (2) the Purchaser shall
have purchased, concurrently with the initial borrowing under
the Tender Offer Facility and pursuant to the Offer, at least
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that number of Shares which, when added to the number of Shares
held by Purchaser, represents the number of Fully Diluted
Shares of the Company which is necessary to effect the Merger
without the affirmative vote of any other shareholder of the
Company; (3) satisfaction of the conditions to the Offer;
(4) receipt by the Purchaser of capital contributions of at
least 18,000,000 Shares and such amount of cash as is necessary
to consummate the Offer, and to do so in compliance with the
applicable margin regulations; (5)(a) receipt of all necessary
governmental approvals and expiration of all applicable waiting
periods without any action being taken by any competent
authority which restrains, prevents or imposes materially
adverse conditions upon the consummation of the Offer or the
Merger and (b) absence of any judgment, order, injunction or
other restraint prohibiting or imposing materially adverse
conditions upon the purchase of Shares pursuant to the Offer or
the consummation of the Merger and absence of pending or
threatened actions, suits or proceedings with respect to the
Purchaser or the Company or its subsidiaries that could
reasonably be expected to have a material adverse effect on the
business, assets, liabilities, financial condition or results
of operations of the Purchaser or have a material adverse ef-
fect on the Offer, the rights or remedies of the lenders or on
the ability of the Purchaser to perform its obligations under
the Tender Offer Facility; (6) reasonable satisfaction of the
Managing Agents with the terms of the Offer and the Merger
Agreement; (7) receipt by the lenders of evidence of solvency
and related matters satisfactory to the Managing Agents;
(8) the lenders shall have a perfected first priority security
interest in the Shares owned by the Purchaser; (9) evidence
that the Purchaser's property is free and clear of all liens
and encumbrances, with certain exceptions (including those in
favor of the lenders); (10) absence of a material adverse
change relating to the Company since January 31, 1994;
(11) absence of stock options, warrants or similar rights to
acquire the capital stock of the Company, with certain excep-
tions; (12) compliance of the Offer, the Merger and the Tender
Loans with all applicable legal requirements, including,
without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System; (13) absence of vio-
lation of contractual restrictions as a result of the Offer and
the Merger which would have a material adverse effect on the
business, assets, liabilities, condition (financial or other-
wise) or results of operations of the Company or which would
have a material adverse effect on the ability of the Purchaser
to perform its obligations under the Tender Facility Agreement;
(14) provision by Comcast, Liberty or their respective sub-
sidiaries of any additional funding necessary to complete the
Offer and undertakings to complete the Merger in a manner and
on terms reasonably satisfactory to the Managing Agents;
-8-
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(15) receipt by the lenders of satisfactory legal opinions; and
(16) payment of costs, fees, expenses and other compensation
contemplated by the Commitment Letter to the lenders or the
Managing Agents to the extent due.
The credit agreement for the Permanent Facility (the
"Permanent Facility Agreement") will be subject to certain
customary conditions precedent, including, without limitation,
the following: (1) satisfaction of all conditions to the
Merger Agreement; (2) receipt of all necessary governmental
approvals in connection with the Merger, the transactions
contemplated by the Merger Agreement and otherwise referred to
in the Permanent Facility, expiration of all applicable waiting
periods without any action being taken by any competent
authority which restrains, prevents or imposes materially ad-
verse conditions upon, the consummation of the Merger, the
absence of any judgment, order, injunction or other restraint
prohibiting or imposing materially adverse conditions upon the
consummation of the Merger and the absence of pending or
threatened actions, suits, proceedings with respect to the
Purchaser, the Company or their subsidiaries that could
reasonably be expected to have a material adverse effect on the
business, assets, liabilities, financial condition or results
of operations of the Purchaser, the Company and its subsid-
iaries, the rights and remedies of the lenders or the ability
of the Company to perform its obligations under the Permanent
Facility Agreement; (3) the Joint Ownership and Management
Agreements and the corporate and capital structure of the
Surviving Corporation shall be reasonably satisfactory in form
and substance to the Managing Agents; (4) receipt by the
lenders of a perfected first priority security interest in the
stock of the Surviving Corporation and its material subsid-
iaries; (5) termination of any bank credit agreements of the
Company and its subsidiaries (other than the Permanent Facil-
ity) and repayment of all amounts outstanding thereunder con-
currently with the initial funding under the Permanent Facil-
ity; (6) the Company's and its subsidiaries' property shall be
free and clear of all liens and encumbrances, with certain
exceptions; (7) absence of material adverse change in the
business, assets, liabilities, financial condition or results
of operations of the Company and its consolidated subsidiaries,
taken as a whole, since the funding of the Tender Offer
Facility; (8) absence of stock options, warrants or similar
rights to acquire the capital stock of the Company, with cer-
tain exceptions; (9) compliance of the Merger with all ap-
plicable legal requirements, including, without limitation,
Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System; (10) the lender's reasonable satis-
faction as to the absence of violation of contractual
restrictions as a result of the Merger which would have a
-9-
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material adverse effect on the business, assets, liabilities,
financial condition or results of operations of the Surviving
Corporation or which would have a material adverse effect on
the ability of the Surviving Corporation to perform its obli-
gations under the Permanent Facility Agreement; (11) the
receipt by the Surviving Corporation of any additional funding
necessary to complete the Merger; (12) receipt by the lenders
of evidence of solvency and related matters; (13) receipt by
the lenders of satisfactory legal opinions; and (14) payment of
all reasonable costs, fees, expenses and other compensation
payable to the lenders or the Managing Agents to the extent
due.
The Commitment Letter has previously been filed as
Exhibit (b)(1) to the Schedule 14D-1, and the foregoing summary
description is qualified in its entirety by reference to such
exhibit.
QVC Bridge Loan. In connection with the financing of
the Offer, the Board of Directors of the Company has autho-
rized, subject to the negotiation and execution of definitive
documentation and the satisfaction of the officers of the
Company with the other relevant terms and conditions of such
loan, the Company to make a loan (the "Company Loan") to the
Purchaser of up to $60 million. In addition, the Company would
be permitted to increase the loan by up to an additional $266
million, which is approximately equal to the difference between
the Purchaser's aggregate costs of financing the Offer and the
Purchaser's net acquisition costs to consummate the Offer and
the Merger. The increased amount of the loan would be funded
from proceeds to be received by the Company from the exercise
of Options prior to the closing of the Offer. It is antici-
pated that the loan will only be drawn down by the Purchaser to
the extent that the Offer and the Merger are not consummated on
the same day. Based upon the balance sheet of the Company for
the fiscal quarter ended October 31, 1994, after funding the
loan described above the Company would have in excess of
$20,000,000 of remaining cash, assuming the exercise of all
outstanding Options and the tender of all outstanding Shares.
The loan described above will have a term of two months and
will bear interest at Prime Rate (to be defined) plus 2.00% per
annum, payable at maturity. The loan will be conditioned upon
the Offer expiring no later than 12:00 Midnight, New York City
time, on Thursday, February 9, 1995, the time at which the
Offer is currently scheduled to expire. The loan will be un-
secured and subordinated to the Tender Offer Facility. The
loan will be drawn down in one or more installments and only
after $1.1 billion of bank financing (all available bank fi-
nancing), not reduced by any fees or holdback, and all capital
-10-
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contributions are used to purchase Shares tendered in the Of-
fer. See "Financing of the Transaction" in the Offer to Pur-
chase, as amended.
In addition, the Company will fund a "rabbi" trust
for outstanding Options not exercised in connection with the
Offer; however, the amount of such funding will reduce the
maximum amount of the Company Loan. See "Special Factors -- The
Merger Agreement" in the Offer to Purchase, as amended.
A copy of the term sheet relating to the foregoing is
filed as Exhibit (b)(2) to the Schedule 14D-1, and the fore-
going summary description is qualified in its entirety by
reference to such exhibit.
Subordinated Debt Financing. The Purchaser does not
expect to raise funds required to consummate the Transaction
through the issuance of subordinated debt securities.
Hart-Scott-Rodino Antitrust Improvements Act of 1976
On January 19, 1995, Comcast and TCI notified the
Federal Trade Commission (the "FTC") of their intention to
consummate the Offer at any time after 5:00 p.m. on Monday,
February 6, 1995, provided that conditions to closing have been
satisfied. Although all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act") relating to the Transaction have expired, the notice was
given to the FTC in accordance with the parties' agreement with
the FTC to provide at least ten days' notice to the FTC prior
to consummating the Offer.
On February 3, 1995, Comcast and TCI were advised by
the FTC that the FTC had closed its investigation with respect
to the Transaction. However, the FTC reserved its right to
take such further action as the public interest may require.
The Merger Agreement
The parties to the Merger Agreement (as defined the
Offer to Purchase) intend to amend the Merger Agreement by a
First Amendment to the Agreement and Plan of Merger (the "First
Amendment") to change the structure of the Merger so that the
Purchaser, rather than a wholly-owned subsidiary of the Pur-
chaser, would be merged with and into the Company (the "Merger"
and, together with the Offer, the "Transaction"). After the
Merger, the Company would continue as the Surviving Corpora-
tion.
-11-
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It is anticipated that the First Amendment will also
provide that (i) the Company, rather than the Purchaser, will
fund the "rabbi" trust referred to under "Financing of the
Transaction -- QVC Bridge Loan" above, (ii) the Company will be
authorized to draw cash funds from the "rabbi" trust for the
purpose of repurchasing any outstanding Options for a price
equal to the difference between $46 per share and the per share
exercise price of such Options at any time after consummation
of the Offer, which the Company will be permitted to do,
(iii) the Company may accelerate the vesting of any outstanding
Option, and (iv) the Company will be permitted to make the
Company Loan.
A copy of the proposed First Amendment will be filed
as an Exhibit to the Schedule 14D-1, and the foregoing summary
description is qualified in its entirety by reference to such
exhibit.
Paramount Options
On August 15, 1994 the options (the "Paramount Op-
tions") to purchase an aggregate of 14,294,600 shares of Common
Stock, which the Company granted to BellSouth, Cox and Advance
pursuant to the Stock Option Agreement, expired without the
exercise thereof, in whole or in part, by any of BellSouth, Cox
or Advance. In connection with the expiration of the Paramount
Options, except as otherwise expressly provided therein, the
Stock Option Agreement (including the Acknowledgement and
Agreement executed by Comcast and Liberty and the other
agreements ancillary thereto and referred to therein) by its
terms, including, without limitation, BellSouth's agreement to
become a party to the Stockholders Agreement in the event that
it purchased shares of Common Stock pursuant to the Stock Op-
tion Agreement, became void and of no effect as to the Company
and each of BellSouth, Cox and Advance. As a result of the
expiration of the Paramount Options, the number of outstanding
Fully Diluted Shares set forth in the Offer to Purchase (which
number had excluded the shares of Common Stock underlying the
Paramount Options) did not change.
Regulatory Approvals
On November 4, 1994, the FCC granted consent to the
transfer of control of the Company's three domestic fixed-
satellite earth station licenses from the stockholders of the
Company to the Purchaser.
-12-
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<PAGE>
Special Factors
Subsequent to the distribution of the Offer to Pur-
chase on August 11, 1994, the Parent Purchasers and the Pur-
chaser amended the Schedule 14D-1 to amend and supplement the
Offer to Purchase to include the information set forth below.
Such information should be read in conjunction with, and as if
given at the same time as, the information contained in the
Offer to Purchase.
The information set forth in clause (i) of the sub-
section entitled "Special Factors -- Fairness of the Transac-
tion -- The Company -- Reasons for Recommendation" in the Offer
to Purchase was amended and supplemented to include the fol-
lowing information:
In connection with its evaluation of the Company's
current financial condition and results of operations and
its future prospects, the Board considered the historical
operating results for the Company as well as the Company's
budgets for its future operations. Among the information
the Board reviewed was the fact that the Company has
launched two new domestic shopping services and that the
Company is a partner in home shopping joint ventures in
Mexico and the United Kingdom. The Board was aware that
Allen described that there may be significant near-term
growth opportunity for the Company's base business in view
of the increasing acceptance of the home shopping indus-
try, but that the Company's rate of growth for its base
business has been decreasing. In addition, the Board
noted that the Company's base business faces increasing
competition from proposed new entrants in the televised
home shopping industry, which include selected retail
department stores and mail order companies, as well as
from other participants in the industry. The Board also
considered the information presented to the Board by Allen
and described in clauses (ii) and (iii) below and under
"-- Opinions and Reports of Financial Advisors -- Opinion
of Allen & Company".
The information set forth in clause (ii) of the
subsection entitled "Special Factors -- Fairness of the Trans-
action -- The Company -- Reasons for Recommendation" in the
Offer to Purchase was amended and supplemented to include the
following information:
In arriving at its recommendation, the Board also
considered the fairness of the consideration to be paid to
stockholders in the Offer and Merger in relation to the
Company's net book value. Based on Allen's analysis, $46
-13-
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per share of Common Stock reflects a multiple of book
value of 3.89, which falls within the range of multiples
of book value in selected merger transactions that Allen
analyzed, which ranged from .53 to 4.34. The Board was
aware that certain valuations of the Company by Allen
reflected values higher than the consideration to be paid
in the Offer. See "-- Opinions and Reports of Financial
Advisors -- Opinion of Allen & Company".
The information set forth in clause (v) of the sub-
section entitled "Special Factors -- Fairness of the Transac-
tion -- The Company -- Reasons for Recommendation" in the Offer
to Purchase was amended and supplemented to include the fol-
lowing information:
The Company considered certain restructuring alter-
natives, such as a tender offer by the Company for its
Shares or the issuance of debt securities to the Company's
stockholders, which would allow the Company to remain
independent and the stockholders to retain an equity in-
terest in the Company; however, following discussion with
Allen with respect to these alternatives, the Board con-
cluded that the consideration to be paid to stockholders
in the Offer and Merger was in the best interests of
stockholders.
The information set forth in the subsection entitled
"Special Factors -- Fairness of the Transaction -- Comcast and
Liberty" in the Offer to Purchase was amended and supplemented
to include the following information:
Comcast and Liberty recognized the fact that the
Transaction is not structured so that approval of at least
a majority of unaffiliated security holders is required,
but did not consider this fact to be material to a
determination of the fairness of the Transaction to un-
affiliated security holders.
Comcast and Liberty recognized the fact that a
majority of directors who are not employees of the Company
has not retained an independent representative to act
solely on behalf of unaffiliated security holders for the
purposes of negotiating the terms of the Transaction and/
or preparing a report concerning the fairness of the
Transaction, but Comcast and Liberty did not consider this
fact to be material to a determination of the fairness of
the transaction to unaffiliated security holders in light
of the fact that Ralph J. and Brian L. Roberts did not
participate in the deliberations or decisions relating to
the Merger Agreement and the engagement of Allen & Company
-14-
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<PAGE>
by the Board, the fact that the Merger Agreement and the
Transaction were unanimously approved by the directors of
the Company other than Ralph J. and Brian L. Roberts, and
the fact that the Offer price and the other terms of the
Merger Agreement were the result of arms-length negotia-
tions between Comcast and Liberty and their respective
advisors, on the one hand, and the Company and its advi-
sors, on the other hand.
Comcast and Liberty believe that the analyses con-
tained in the Lazard Report, which included, among other
things, an analysis of the going concern value of the
Company, provide a sufficient basis for Comcast's and
Liberty's consideration of the value of the Company. See
"-- Opinions and Reports of Financial Advisors -- Opinions
and Report of Lazard". Therefore, Comcast and Liberty did
not prepare any independent analysis of book value or
liquidation value, and did not believe it necessary to
consider whether the consideration offered to unaffiliated
security holders constitutes fair value in relation to net
book value, liquidation value or the purchase price paid
in previous purchases disclosed in Item 1(f) of the
Schedule 13E-3.
Comcast and Liberty recognized the fact that certain
valuations obtained by Lazard were higher than the Offer
price, while other valuations obtained by Lazard were
lower than the Offer price. See "-- Opinions and Reports
of Financial Advisers -- Opinion and Report of Lazard".
Comcast and Liberty did not consider this fact to be
material to a determination of the fairness of the
Transaction to unaffiliated security holders.
Comcast did not obtain a valuation of the consider-
ation offered by CBS other than that contained in the
Lazard Report. The Lazard Report included a valuation of
the consideration offered to the Company's stockholders in
the CBS Proposal based upon projected EBITDA exit mul-
tiples of 7.0x, 7.5x, 8.0x, 8.5x and 9.0x for CBS and the
Company and derived implied deal prices of the CBS Pro-
posal ranging from $31 to $41 per share of the Company's
Common Stock. Based upon the Lazard Report, Comcast
determined that the implied deal price for the Company's
Common Stock in the CBS Proposal was $41 per share.
Liberty did not prepare an independent analysis of
the CBS Proposal and did not retain any person to prepare
such an analysis on its behalf. Liberty did, however,
review certain summaries of the CBS Proposal prepared by
Allen for the Company in connection with Liberty's review
-15-
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<PAGE>
of the CBS Proposal and its determination of whether to
support the CBS Proposal. Such summaries contained an
estimate of the value of the consideration to be offered
by CBS as part of the CBS Proposal that implied a value of
approximately $35 to $47 per share of Common Stock, based
on a range of multiples of estimated pro forma 1994 EBITDA
for CBS and the Company between 8.0x and 10.0x. In addi-
tion, following the announcement of the Comcast Proposal
and the termination of the CBS Proposal, Liberty also
reviewed certain portions of the Lazard Report provided to
Liberty by Comcast relating to the value of the CBS Pro-
posal. Other than its review of the Allen summary and
portions of the Lazard Report, Liberty did not prepare any
independent analysis of the value of the Common Stock in
the CBS Proposal and did not attempt to verify the in-
formation contained in the summaries prepared by Allen or
in the Lazard Report.
The information set forth in clause (v) of the sub-
section entitled "Special Factors -- Opinions and Reports of
Financial Advisors -- Opinion of Allen & Company" in the Offer
to Purchase was amended and supplemented to include the fol-
lowing information:
Allen's analysis yielded a per share valuation
ranging between $34.18 based on a 25% discount rate and a
multiple of projected EBITDA of 7.0 and $58.88 based on a
15% discount rate and a multiple of projected EBITDA of
9.0.
The information set forth in clause (vi) of the
subsection entitled "Special Factors -- Opinions and Reports of
Financial Advisors -- Opinion of Allen & Company" in the Offer
to Purchase was amended and restated in its entirety as fol-
lows:
(vi) Other Factors Considered. (a) Allen reviewed
recent trends in the market price and trading volume of
the shares of Common Stock, (b) Allen compared the recent
trends in the market price of the Common Shares with the
Standard & Poor's 500 Index, an index comprised of the
Cable Programming Companies and an index comprised of the
Specialty Retailing Companies, (c) Allen compared market
reaction as reflected in the price of the shares of Common
Stock relating to selected public announcements relating
to the Company. This comparison included, among other
things, a review of the market prices of the shares of
Common Stock prior to and following the announcement of
the CBS Proposal and the announcement of the Comcast
Proposal and prior to the announcement of the July 21,
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1994 revised proposal of Comcast and Liberty (the
"Comcast/Liberty Proposal"), and reviewed certain other
relevant factors influencing the price of the shares of
Common Stock, (d) Allen considered the foregoing analyses,
together with the other analyses Allen made, and analyzed
the relevant dates for purposes of determining a repre-
sentative value for the shares of Common Stock. Allen
concluded that the closing market price of $32.38 on June
29, 1994, the date prior to the announcement of the CBS
Proposal, was a representative price for the shares of
Common Stock and the consideration to be paid in the Offer
and the Merger represented a 42.1% premium over the market
price on that date, (e) Allen compared the premium of the
$46 price to be paid in the Offer and the Merger to var-
ious recent market prices for the shares of Common Stock
and to premiums paid in selected cash merger transactions.
The premium of the $46 price over market prices for the
shares of Common Stock on the Comparison Dates (which were
June 29, 1994, July 12, 1994 and August 2, 1994) and on
certain dates prior to June 29, 1994 ranged from 42.1% on
June 29, 1994 to 4.0% on August 2, 1994 (thedate prior to
Comcast and Liberty advising the Company that they would
consider a transaction involving an increase in consid-
eration to be paid pursuant to the Comcast/Liberty Pro-
posal to $46 per share (on a common equivalent basis)).
The premiums paid in selected all cash merger transactions
ranged from 10.0% to 82.5%. The multiple of sales,
EBITDA, net income and book value in selected merger
transactions ranged from 0.10 to 6.22 (compared to a 1.79
multiple of sales based on a $46 per share of Common Stock
valuation), 1.1 to 30.0 (compared to an 11.4 multiple of
EBITDA based on a $46 per share of Common Stock valua-
tion), 10.7 to 27.2 (compared to a 29.2 multiple of net
income based on a $46 per share of Common Stock valuation)
and 0.53 to 4.34 (compared to a 3.89 multiple of book
value based on a $46 per share of Common Stock valuation),
respectively.
Allen determined from the foregoing that (a) the
premium of the Offer and the Merger price over the recent
market prices for the shares of Common Stock fell within the
range of premiums paid in selected all cash merger transactions
and (b) the multiples of sales, EBITDA, net income and book
value offered to the Company in the Offer and the Merger fell
within or above the range of such multiples in selected merger
transactions in generally comparable industries.
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Certain Information Concerning the Company
The following selected financial data relating to the
Company and its subsidiaries has been taken or derived from the
audited financial statements contained in the Company 10-K (as
defined in the Offer to Purchase) and the unaudited financial
statements contained in the Company's Quarterly Reports on Form
10-Q for its fiscal quarters ended October 31, 1994 and 1993
(the "Nine Month Company 10-Qs"). More comprehensive financial
information is included in the Company 10-K and the Nine Month
Company 10-Qs and the other documents filed by the Company with
the Commission, and the financial data set forth below is
qualified in its entirety by reference to such reports and
other documents including the financial statements contained
therein. Such reports and other documents may be examined and
copies may be obtained from the offices of the Commission in
the manner set forth below.
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<TABLE>
QVC, INC.
SELECTED FINANCIAL DATA
(In thousands, except per share amounts and ratios)
<CAPTION>
At and For the At and For the
Nine Months Ended Fiscal Year Ended
October 31 January 31,
1994 1993 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net revenue................................. $964,185 $849,615 $ 1,222,104 $ 1,070,587 $921,804
Income before extraordinary item
and cumulative effect of change
in accounting principle................... 38,256 52,465 55,311 56,588 21,733
Net income.................................. 38,256 56,455 59,301 55,092 19,625
Income per common share:
Primary:
Income before extraordinary item
and cumulative effect of change
in accounting principle................. .78 1.04 1.10 1.32 .68
Net income............................ .78 1.12 1.18 1.29 .61
Fully diluted:
Income before extraordinary item............ .78 1.04 1.10 1.27 .67
Net income................................ .78 1.12 1.18 1.24 .61
Cash dividends per common share............... - - - - -
Balance Sheet Data:
Total assets................................ 1,009,357 828,879 878,160 699,695 714,539
Long-term debt, less current
maturities................................ 6,599 7,185 7,044 7,586 152,461
Supplementary Data:
Ratio of earnings to fixed charges.......... 8.86x 11.10x 23.45x 4.88x 1.99x
Book value per common share................. $13.17 $12.22 $12.32 $10.34 $8.96
</TABLE>
The information concerning the Company contained
herein has been taken from or is based upon reports and other
documents on file with the Commission or otherwise publicly
available. Although the Purchaser does not have any knowledge
that would indicate that any statements contained herein based
upon such reports and documents are untrue, the Purchaser does
not take any responsibility for the accuracy or completeness of
the information contained in such reports and other documents
or for any failure by the Company to disclose events that may
have occurred and may affect the significance or accuracy of
any such information but that are unknown to the Purchaser.
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<PAGE>
The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith
files periodic reports, proxy statements and other information
with the Commission relating to its business, financial con-
dition and other matters. The Company is required to disclose
in such proxy statements certain information, as of particular
dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interest
of such persons in transactions with the Company. Such
reports, proxy statements and other information may be
inspected at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and should also be available for in-
spection and copying at the regional offices of the Commission
of New York (Jacob K. Javits Federal Building, 26 Federal
Plaza, New York, New York 10278) and Chicago (Everett McKinley
Dirksen Building, 219 South Dearborn Street, Chicago, Illinois
60604). Copies of such material can also be obtained from the
Public Reference Section of the Commission in Washington, D.C.
20549, at prescribed rates.
Certain Information Concerning the Purchaser and Parent Pur-
chasers
The TCI/Liberty Merger (as defined in the Offer to
Purchase) was consummated on August 4, 1994. In connection
with the TCI/Liberty Merger and the subsequent restructuring of
the assets of TCI, (a) the corporate name of Liberty Media
Corporation was changed to TCI Cable Investments, Inc. (here-
inafter referred to as "Old Liberty") and a new wholly-owned
subsidiary of TCI was incorporated under the name "Liberty
Media Corporation" (referred to herein as "Liberty", which
entity presently holds substantially all of the programming
assets owned by TCI), (b) Liberty QVC, Inc., which at the time
of the execution of the Joint Bidding Agreement was the wholly-
owned subsidiary of Old Liberty that held all of the Shares to
be contributed by Old Liberty to the Purchaser in the Parent
Contribution, became a wholly-owned subsidiary of Liberty, and
Liberty QVC, Inc. continues to hold such Shares, and (c) cer-
tain former subsidiaries of Old TCI that held Shares became
wholly-owned subsidiaries of Liberty or transferred their
Shares to Liberty or its wholly-owned subsidiaries.
As a result of the events described in the foregoing
paragraph, TCI and Comcast entered into a letter agreement (the
"TCI Letter Agreement") dated as of October 13, 1994. The TCI
Letter Agreement provides, among other things, that Liberty (a)
agrees to be bound by all of the provisions of the Joint
Bidding Agreement, (b) assumes and agrees, subject to the terms
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<PAGE>
and conditions set forth therein, to perform all liabilities
and obligations of Old Liberty under the Joint Bidding Agree-
ment (including, but not limited to, the obligations regarding
the contribution to the Purchaser of Shares (the "Liberty
Shares") and cash in connection with the consummation of the
Offer) and (c) agrees to make an additional contribution to the
Purchaser of the 17,922 shares of Series B Preferred Stock and
113,040 shares of Common Stock acquired by Liberty as a result
of the transactions described in clause (c) of the preceding
paragraph (the "Liberty Additional Shares") upon the same terms
and conditions as the Liberty Shares are to be contributed to
the Purchaser. The TCI Letter Agreement further provides that
the contribution of the Liberty Additional Shares will reduce
the amount of cash to be contributed by Liberty to the Pur-
chaser pursuant to the Joint Bidding Agreement in connection
with the consummation of the Offer by $13,443,960 (which is the
amount obtained by multiplying the 292,260 Fully Diluted Shares
comprising the Liberty Additional Shares by the Offer price of
$46 per share of Common Stock), and as a result the Liberty
Additional Contribution (as defined in the Joint Bidding
Agreement) will be $6,556,040. See "Financing of the Transac-
tion" in the Offer to Purchase, as amended.
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Facsimile copies of the Letters of Transmittal will be
accepted. The Letters of Transmittal and certificates for
Shares and any other required documents should be sent to the
Depositary at one of the addresses set forth below:
The Depositary
The Bank of New York
(For Information Call (800) 507-9357)
<TABLE>
<C> <C> <C>
By Mail: By Facsimile: By Hand of Overnight Courier:
Tender & Exchange Dept (212) 815-6213 Tender & Exchange Dept.
P.O. Box 11248 101 Barclay Street
Church Street Station Confirm by telephone Receive and Deliver Window
New York, NY 10286-1248 (800) 507-9357 New York, NY 10286
</TABLE>
Questions or requests for assistance or additional
copies of the Offer to Purchase, this Supplement and the
related Letters of Transmittal may be directed to the Infor-
mation Agent or the Dealer Manager at their respective ad-
dresses and telephone numbers set forth below. Stockholders
may also contact their broker, dealer, commercial bank or trust
company for assistance concerning the Offer.
The Information Agent is:
D.F. King & Co., Inc.
<TABLE>
<C> <C> <C>
135 South LaSalle Street 77 Water Street 9841 Airport Boulevard
Chicago, Illinois 60603 New York, New York 10005 Los Angeles, California 90045
(312) 236-5881 (collect) (212) 269-5550 (collect) (213) 215-3860 (collect)
</TABLE>
or
Call Toll-Free (800) 735-3591
The Dealer Manager for the Offer is:
LAZARD FRERES & CO.
One Rockefeller Plaza
New York, New York 10020
(212) 632-6000
(call collect)
February 3, 1995
-22-
<PAGE>
EXHIBIT 15
LETTER OF TRANSMITTAL
To Tender Shares
of
Common Stock,
Series B Preferred Stock
and
Series C Preferred Stock
of
QVC, Inc.
Pursuant to the Offer to Purchase
dated August 11, 1994
of
QVC Programming Holdings, Inc.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, FEBRUARY 9, 1995, UNLESS THE OFFER
IS EXTENDED.
To: The Bank of New York, Depositary
<TABLE>
<C> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange (212) 815-6213 Tender & Exchange
Department Department
P.O. Box 11248 Confirm by Telephone: 101 Barclay Street
Church Street Station (800) 507-9357 Receive and Deliver Window
New York, NY 10286-1248 New York, NY 10286
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A
FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL
SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.
This revised Letter of Transmittal or the previously circu-
lated original Letter of Transmittal is to be used by stockholders
if certificates for Shares (as defined below) are to be forwarded
herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery of Common Shares is to be made
by book-entry transfer to the Depositary's account at The De-
pository Trust Company, Midwest Securities Trust Company or
Philadelphia Depository Trust Company (hereinafter collectively
referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth under "The Tender Offer -- 3. Procedure
PAGE
<PAGE>
for Tendering Shares" in the Offer to Purchase dated August 11,
1994, as amended. Stockholders who tender Common Shares by book-
entry transfer are referred to herein as "Book-Entry Stockhold-
ers."
Holders of Shares whose certificates for such Shares (the
"Share Certificates") are not immediately available or who cannot
deliver their Share Certificates and all other documents required
hereby to the Depositary on or prior to the Expiration Date (as
defined in the Offer to Purchase) or who cannot complete the
procedures for book-entry transfer on a timely basis, must tender
their Shares pursuant to the guaranteed delivery procedure set
forth under "The Tender Offer -- 3. Procedure for Tendering
Shares" in the Offer to Purchase. See Instruction 2.
-2-
PAGE
<PAGE>
_______________
DESCRIPTION OF SHARES TENDERED
_______________
Name(s) and Address(es)
of Registered Holder(s)
(Please fill in, if blank,
exactly as name(s) appear(s)
on Share Certificate(s))
_______________
<TABLE>
_______________
Share Certificate(s) and Share(s) Tendered
(Attach additional list if necessary)
<C> <C> <C> <C>
Class and Series Total Number
Share of Shares of Shares Number of
Certificate Represented by Represented by Shares
Number(s)* Share Certificate(s) Share Certificate(s)* Tendered**
_______________ _______________ _______________ _______________
_______________ _______________ _______________ _______________
_______________ _______________ _______________ _______________
_______________ _______________ _______________ _______________
Total Shares of Common Stock............................... _______________
Total Shares of Series B Preferred Stock............. _______________
Total Shares of Series C Preferred Stock............. _______________
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any
certificates delivered to the Depositary are being tendered. See Instruction 4.
_______________
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK
COVER. PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY.
</TABLE>
-3-
PAGE
<PAGE>
[] CHECK HERE IF TENDERED COMMON SHARES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF
THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOL-
LOWING:
Name of Tendering Institution.............................
Account No..............................................at
[] The Depository Trust Company
[] Midwest Securities Trust Company
[] Philadelphia Depository Trust Company
Transaction Code No......................................
[] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
DEPOSITARY AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A
PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY:
Name(s) of Registered Stockholder(s).......................
Window Ticket Number (if any)..............................
Date of Execution of Notice of Guaranteed Delivery.........
Name of Institution which Guaranteed Delivery..............
_______________
-4-
PAGE
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to QVC Programming Hold-
ings, Inc., a Delaware corporation (the "Purchaser") to be
wholly owned by Comcast Corporation, a Pennsylvania corporation
("Comcast") and Liberty Media Corporation, a Delaware corpo-
ration ("Liberty" and, together with Comcast, the "Parent
Purchasers") and a wholly owned subsidiary of Tele-Communica-
tions, Inc., the above-described shares (the "Shares") of
Common Stock, $.01 par value per share (the "Common Stock"),
and Series B Preferred Stock and Series C Preferred Stock, each
$.10 par value per share (together, the "Preferred Stock"), of
QVC, Inc., a Delaware corporation (the "Company"), pursuant to
the Purchaser's offer to purchase all outstanding Shares at a
price of $46 per share of Common Stock and $460 per share of
Preferred Stock, 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 August 11, 1994 (the "Offer to
Purchase"), the Supplement to Offer to Purchase dated February
3, 1995 (the "Supplement"), receipt of which is hereby ac-
knowledged, and in this revised Letter of Transmittal (which,
together with the Offer to Purchase, the Supplement, the
amendments thereto, and the related Letter of Transmittal,
constitute the "Offer"). For purposes of this Letter of
Transmittal, "Common Shares" means the Shares of Common Stock
and "Preferred Shares" means the Shares of Preferred Stock.
The Purchaser reserves the right to transfer or assign, in
whole or from time to time in part, to one or more of its
subsidiaries or affiliates the right to purchase any or all
Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of
and payment for the Shares tendered herewith in accordance with
the terms and subject to the conditions of the Offer, the un-
dersigned hereby sells, assigns and transfers to, or upon the
order of, the Purchaser all right, title and interest in and to
all the Shares that are being tendered hereby (and any and all
other Shares or other securities issued or issuable in respect
thereof on or after August 4, 1994) and any and all dividends
thereon or distributions with respect thereto and irrevocably
appoints the Depositary the true and lawful agent, attorney-in-
fact and proxy of the undersigned to the full extent of the
undersigned rights with respect to the Shares (and all such
other Shares or securities), with full power of substitution
(such power of attorney and proxy being deemed to be an ir-
revocable power coupled with an interest), to (a) deliver Share
Certificates for such Shares (and all such other Shares and
securities), or, in the case of Common Shares, transfer own-
ership of such Common Shares (and all such other Common Shares
or securities) on the account books maintained by any of the
-5-
PAGE
<PAGE>
Book-Entry Transfer Facilities, together, in any such case,
with all accompanying evidences of transfer and authenticity,
to or upon the order of the Purchaser upon receipt by the De-
positary, or as the undersigned's agent, of the purchase price,
(b) present such Shares for transfer on the books of the Com-
pany and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares, all in ac-
cordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Brian L.
Roberts, John R. Alchin and Stanley L. Wang and each of them,
the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution, to exercise all voting and other
rights of the undersigned in such manner as each such attorney
and proxy or his substitute shall in his sole discretion deem
proper, with respect to all of the Shares tendered hereby which
have been accepted for payment by the Purchaser prior to the
time of any vote or other action for which the undersigned is
entitled to vote at any meeting of stockholders (whether annual
or special and whether or not an adjourned meeting), by written
consent or otherwise. This power of attorney and proxy is
coupled with an interest in the Company and in the Shares and
is irrevocable and is granted in consideration of, and is ef-
fective upon, the acceptance for payment of such Shares by the
Purchaser in accordance with the terms of the Offer. Such
acceptance for payment shall revoke, without further action,
any other power of attorney or proxy granted by the undersigned
at any time with respect to such Shares and no subsequent
powers of attorneys or proxies will be given (and if given will
be deemed not to be effective) with respect thereto by the
undersigned. The undersigned understands that the Purchaser
reserves the right to require that, in order for such Shares to
be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Shares, the Purchaser is able to
exercise full voting rights with respect to such Shares and
other securities, including voting at any meeting of stock-
holders.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, as-
sign and transfer the Shares tendered hereby and that when the
same are accepted for payment by the Purchaser, the Purchaser
will acquire good and unencumbered title thereto, free and
clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claims. The undersigned will, upon
request, execute and deliver any additional documents deemed by
the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares ten-
dered hereby. In addition, the undersigned will promptly remit
and transfer to the Depositary for the account of the Purchaser
-6-
PAGE
<PAGE>
any and all other distributions in respect of the Shares ten-
dered hereby, accompanied by appropriate documentation of
transfer and, pending such remittance or appropriate assurance
thereof, the Purchaser shall be entitled to all rights and
privileges as owner of any such distributions, and may withhold
the entire purchase price or deduct from the purchase price of
Shares tendered hereby, the amount or value thereof, as de-
termined by the Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred
shall survive the death or incapacity of the undersigned, and
any obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and as-
signs of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
The undersigned understands that tenders of Shares pur-
suant to any one of the procedures described under "The Tender
Offer -- 3. Procedure for Tendering Shares" in the Offer to
Purchase and in the instructions hereto will constitute a
binding agreement between the undersigned and the Purchaser
upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment
Instructions," please issue the check for the purchase price
and/or return any Share Certificates not tendered or accepted
for payment in the name(s) of the undersigned. Similarly,
unless otherwise indicated under "Special Delivery Instruc-
tions," please mail the check for the purchase price and/or
return any Share Certificates not tendered or accepted for
payment (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's sig-
nature. In the event that both the "Special Delivery In-
structions" and the "Special Payment Instructions" are com-
pleted, please issue the check for the purchase price and/or
return any Share Certificates not tendered or accepted for
payment in the name(s) of, and deliver said check and/or return
certificates to, the person or persons so indicated. Stock-
holders tendering Common Shares by book-entry transfer may
request that any Common Shares not accepted for payment be
returned by crediting such account maintained at such Book-
Entry Transfer Facility as such stockholder may designate by
making an appropriate entry under "Special Payment Instruc-
tions." The undersigned recognizes that the Purchaser has no
obligation pursuant to the "Special Payment Instructions" to
transfer any Shares from the name of the registered holder
thereof if the Purchaser does not accept for payment any of
such Shares.
-7-
PAGE
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price
of Shares purchased or Shares Certificates not tendered or not
purchased are to be issued in the name of someone other than
the undersigned, or if Common Shares tendered by book-entry
transfer that are not purchased are to be returned by credit to
an account at one of the Book-Entry Transfer Facilities other
than that designated above.
Issue check and/or certificates to:
Name..........................................................
(Please Print)
Address........................................................
(Zip Code)
...............................................................
(Taxpayer Identification No. or Social Security No.)
(See Substitute Form W-9 below)
[] Credit unpurchased Common Shares tendered by book-entry
transfer to the account set forth below:
Name of Account Party..........................................
Account No...................................................at
[] The Depository Trust Company
[] Midwest Securities Trust Company
[] Philadelphia Depository Trust Company
-8-
PAGE
<PAGE>
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price
of Shares purchased or Shares Certificates not tendered or not
purchased are to be mailed to someone other than the under-
signed or to the undersigned at an address other than that
shown below the undersigned's signature(s).
Mail check and/or certificates to:
Name..........................................................
(Please Print)
Address.......................................................
....................................................(Zip Code)
.............................................................
(Taxpayer Identification No. or Social Security No.)
-9-
PAGE
<PAGE>
SIGN HERE
(Please complete Substitute Form W-9 below)
..............................................................
Signature(s) of Owner(s)
..............................................................
Dated.....................................................1995
Name(s).......................................................
(Please Print)
Capacity (full title).........................................
Address.......................................................
..............................................................
..............................................................
(Include Zip Code)
Area Code and Telephone No....................................
Tax Identification or Social Security No......................
(See Substitute Form W-9 on Reverse Side)
(Must be signed by registered holder(s) exactly as name(s)
appear(s) on stock certificate(s) or on a security position
listing or by person(s) authorized to become registered hold-
er(s) by certificates and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person act-
ing in a fiduciary or representative capacity, please set forth
full title and see Instruction 5.)
-10-
PAGE
<PAGE>
Guarantee of Signature(s)
(If required -- See Instructions 1 and 5)
Name of Firm..................................................
Authorized Signature..........................................
Name .........................................................
Address.......................................................
Area Code and Telephone Number................................
Dated 1995
-11-
PAGE
<PAGE>
<TABLE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(See Instruction 8)
PAYER'S NAME: THE BANK OF NEW YORK
<C> <C> <C>
Part 1 -- PLEASE PROVIDE YOUR TIN ______________________________
IN THE BOX AT RIGHT AND CERTIFY Social Security Number or
BY SIGNING AND DATING BELOW. ______________________________
SUBSTITUTE Employer Identification Number
Form W-9
Department of the Treasury
Internal Revenue Service
Payer's Request for Taxpayer
Identification Number (TIN)
</TABLE>
______________________________________________________________
Part II
______________________________________________________________
Certification - Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer
identification number (or I am waiting for a number to be
issued to me);
(2) I am not subject to backup withholding because (a) I am
exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service ("IRS") that I am
subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has no-
tified me that I am no longer subject to backup with-
holding.
Certification Instructions -- You must cross out item (2)
above if you have been notified by the IRS that you are
currently subject to backup withholding because of un-
derreporting interest or dividends on your tax return.
However, if after being notified by the IRS that you were
subject to backup withholding you received another noti-
fication from the IRS that you are no longer subject to
backup withholding, do not cross out such item (2).
_______________
SIGNATURE_____________DATE ________, 1995 Part III
Awaiting TIN []
_____________________________________________________________
-12-
PAGE
<PAGE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU
PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE
BOX IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identifi-
cation number has not been issued to me, and either (1) I have
mailed or delivered an application to receive a taxpayer iden-
tification number to the appropriate Internal Revenue Service
Center or Social Security Administration Office or (2) I intend
to mail or deliver an application in the near future. I un-
derstand that if I do not provide a taxpayer identification
number by the time of payment, 31% of all reportable payments
made to me will be withheld, but that such amounts will be re-
funded to me if I then provide a Taxpayer Identification Number
within sixty (60) days.
Signature __________________________________ Date______________
-13-
PAGE
<PAGE>
SECTION 1445 CERTIFICATION
A. Form for Individual Transferors
Section 1445 of the Internal Revenue Code provides that a
transferee (buyer) of a U.S. real property interest must
withhold tax if the transferor (seller) is a foreign person.
To inform the transferee (buyer) that withholding of tax is not
required upon my disposition of a U.S. real property interest,
I, , hereby certify the following:
1. I am not a nonresident alien for purposes of U.S.
income taxation;
2. My U.S. taxpayer identifying number (Social Security
number) is ________________________
3. My home address is: _____________________________
____________________________________________________
I understand that this certification may be disclosed to
the Internal Revenue Service by the transferee and that any
false statement I have made here could be punished by fine,
imprisonment, or both.
Under penalties of perjury I declare that I have examined
this certification and to the best of my knowledge and belief
it is true, correct, and complete.
SIGNATURE _______________________________ DATE __________, 1995
B. Form for Entity Transferors
Section 1445 of the Internal Revenue Code provides that a
transferee of a U.S. real property interest must withhold tax
if the transferor is a foreign person. To inform the trans-
feree that withholding of tax is not required upon the dispo-
sition of a U.S. real property interest by it, the undersigned
hereby certifies on behalf of ____________________________ the
following information with respect to it:
1. It is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are
defined in the Internal Revenue Code and Income Tax
Regulations).
2. U.S. employer identification number:_________________
-14-
PAGE
<PAGE>
3. Office address: _____________________________________
_____________________________________
It is understood that this certification may be disclosed
to the Internal Revenue Service by transferee and that any
false statement contained herein could be punished by fine,
imprisonment or both.
Under penalties of perjury I declare that I have examined
this certification and to the best of my knowledge and belief
it is true, correct and complete, and I further declare that I
have authority to sign this document on behalf of the afore-
mentioned entity.
SIGNATURE ____________________________ DATE ___________, 1995
TITLE _________________________________________________________
NOTE: SEE INSTRUCTION 9 FOR INFORMATION REGARDING THIS FORM.
-15-
PAGE
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise pro-
vided below, all signatures on this Letter of Transmittal must
be guaranteed by a firm which is a member of a registered na-
tional securities exchange or the National Association of Se-
curities Dealers, Inc., or by a commercial bank or trust com-
pany having an office or correspondent in the United States (an
"Eligible Institution"). Signatures on this Letter of Trans-
mittal need not be guaranteed (a) if this Letter of Transmittal
is signed by the registered holder(s) of the Shares (which
term, in the case of Common Shares and for purposes of this
document, shall include any participant in one of the Book-
Entry Transfer Facilities whose name appears on a security
position listing as the owner of Common Shares) tendered
herewith and such holder(s) have not completed the instruction
entitled "Special Payment Instructions" on this Letter of
Transmittal or (b) if such Shares are tendered for the account
of an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This
Letter of Transmittal is to be used either if Share Certifi-
cates are to be forwarded herewith or, unless an Agent's Mes-
sage (as defined in the Offer to Purchase, as amended), is
utilized, if delivery of Common Shares is to be made by book-
entry transfer pursuant to the procedures set forth under "The
Tender Offer -- 3. Procedures for Tendering Shares" in the
Offer to Purchase, as amended. Share Certificates, or a con-
firmation of a book-entry transfer into the Depositary's ac-
count at one of the Book-Entry Transfer Facilities of all
Common Shares delivered electronically, as well as a properly
completed and duly executed Letter of Transmittal (or facsimile
thereof), or an Agent's Message, and any other documents re-
quired by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal by the Expiration Date. Stock-
holders whose Share Certificates are not immediately available
or who cannot deliver their Share Certificates and all other
required documents to the Depositary by the Expiration Date or,
in the case of stockholders who hold Common Shares, who cannot
complete the procedures for delivery by book-entry transfer on
a timely basis, must tender their Shares pursuant to the
guaranteed delivery procedure set forth under "The Tender Offer
-- 3. Procedures for Tendering Shares" in the Offer to Pur-
chase, as amended. Pursuant to such procedure: (a) such
tender must be made by or through an Eligible Institution, (b)
a properly completed and duly executed Notice of Guaranteed
-16-
PAGE
<PAGE>
Delivery substantially in the form provided by the Purchaser
must be received by the Depositary by the Expiration Date and
(c) the Share Certificates or a confirmation of a book-entry
transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Common Shares delivered electroni-
cally, as well as a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) (or, in the case of a
book-entry delivery, an Agent's Message) and any other docu-
ments required by this Letter of Transmittal, must be received
by the Depositary on the National Association of Securities
Dealers, Inc. Automatic Quotation System/National Market System
within five trading days after the date of execution of such
Notice of Guaranteed Delivery, all as provided under "The
Tender Offer -- 3. Procedures for Tendering Shares" in the
Offer to Purchase, as amended. If Shares are forwarded sepa-
rately to the Depositary, each must be accompanied by a duly
executed Letter of Transmittal (or facsimile thereof).
The Preferred Shares are not eligible for admission to the
Book-Entry Transfer Facilities and delivery of Preferred Shares
may not be effected by book-entry transfer.
The method of delivery of Share Certificates, this Letter
of Transmittal and all other required documents including in
the case of Common Shares, through Book-Entry Transfer Fa-
cilities, is at the option and sole risk of the tendering
stockholder and the delivery will be deemed made only when
actually received by the Depositary. If delivery is by mail,
registered mail with return receipt requested, properly issued,
is recommended. In all cases, sufficient time should be al-
lowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be
accepted, and no fractional Shares will be purchased. By ex-
ecuting this Letter of Transmittal (or facsimile thereof), the
tendering stockholder waives any right to receive any notice of
the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is
inadequate, the certificate numbers and/or the number of Shares
and any other required information should be listed on a
separate schedule attached hereto and separately signed on each
page thereof in the same manner as this Letter of Transmittal
is signed.
4. Partial Tenders (not applicable to stockholders who
tender by book-entry transfer). If fewer than all the Shares
represented by any certificate delivered to the Depositary are
to be tendered, fill in the number of Shares which are to be
tendered in the box entitled "Number of Shares Tendered." In
-17-
PAGE
<PAGE>
such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the
person(s) signing this Letter of Transmittal, unless otherwise
provided in the appropriate box on this Letter of Transmittal,
as promptly as practicable following the expiration or termi-
nation of the Offer. All Shares represented by certificates
delivered to the Depositary will be deemed to have been ten-
dered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and
Endorsements. If this Letter of Transmittal is signed by the
registered holder(s) of the Shares tendered hereby, the
signature(s) must correspond with the name(s) as written on the
face of the certificates without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are held of record by
two or more persons, all such persons must sign this Letter of
Transmittal.
If any of the Shares tendered hereby are registered in
different names on different certificates, it will be necessary
to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of certifi-
cates.
If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of
certificates or separate stock powers are required unless
payment of the purchase price is to be made, or Shares not
tendered or not purchased are to be returned, in the name of
any person other than the registered holder(s). Signatures on
any such certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other
than the registered holder(s) of the Shares tendered hereby,
certificates must be endorsed or accompanied by appropriate
stock powers, in either case, signed exactly as the name(s) of
the registered holder(s) appear(s) on the certificates for such
Shares. Signature(s) on any such certificates or stock powers
must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock
power is signed by a trustee, executor, administrator, guard-
ian, attorney-in-fact, officer of a corporation or other person
acting in a fiduciary or representative capacity, such person
should so indicate when signing, and proper evidence satis-
factory to the Purchaser of the authority of such person so to
act must be submitted.
-18-
PAGE
<PAGE>
6. Stock Transfer Taxes. Except as noted in this In-
struction 6, the Purchaser will pay any stock transfer taxes
with respect to the sale and transfer of any Shares to it or
its order pursuant to the Offer. If, however, payment of the
purchase price is to be made to, or Shares not tendered or not
purchased are to be returned in the name of, any person other
than the registered holder(s), or if a transfer tax is imposed
for any reason other than the sale or transfer of Shares to the
Purchaser pursuant to the Offer, then the amount of any stock
transfer taxes (whether imposed on the registered holder(s),
such other person or otherwise) will be deducted from the
purchase price unless satisfactory evidence of the payment of
such taxes, or exemption therefrom, is submitted herewith.
Except as provided in this Instruction 6, it will not be
necessary for Transfer Tax Stamps to be affixed to the cer-
tificates listed in this Letter of Transmittal.
7. Special Payment and Delivery Instructions. If the
check for the purchase price of any Shares purchased is to be
issued, or any Shares not tendered or not purchased are to be
returned, in the name of a person other than the person(s)
signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be
mailed to someone other than the person(s) signing this Letter
of Transmittal or to the person(s) signing this Letter of
Transmittal at an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be
completed. Stockholders tendering Common Shares by book-entry
transfer may request that Common Shares not purchased be
credited to such account at any of the Book-Entry Transfer
Facilities as such stockholder may designate under "Special
Payment Instructions." If no such instructions are given, any
such Common Shares not purchased will be returned by crediting
the account at the Book-Entry Transfer Facilities designated
above.
8. Substitute Form W-9. Under the federal income tax
laws, the Depositary will be required to withhold 31% of the
amount of any payments made to certain stockholders pursuant to
the Offer. In order to avoid such backup withholding, each
tendering stockholder, and, if applicable, each other payee,
must provide the Depositary with such stockholder's or payee's
correct taxpayer identification number and certify that such
stockholder or payee is not subject to such backup withholding
by completing the Substitute Form W-9 set forth above. In
general, if a stockholder or payee is an individual, the tax-
payer identification number is the Social Security number of
such individual. If the Depositary is not provided with the
correct taxpayer identification number, the stockholder or
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payee may be subject to a $50 penalty imposed by the Internal
Revenue Service. Certain stockholders or payees (including,
among others, all corporations and certain foreign individuals)
are not subject to these backup withholding and reporting re-
quirements. In order to satisfy the Depositary that a foreign
individual qualifies as an exempt recipient, such stockholder
or payee must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Depositary. For further
information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a
taxpayer identification number if you do not have one and how
to complete the Substitute Form W-9 if Shares are held in more
than one name), consult the enclosed Guidelines for Certifi-
cation of Taxpayer Identification Number on Substitute Form
W-9.
Failure to complete the Substitute Form W-9 will not, by
itself, cause Shares to be deemed invalidly tendered, but may
require the Depositary to withhold 31% of the amount of any
payments made pursuant to the Offer. Backup withholding is not
an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results
in an overpayment of taxes, a refund may be obtained provided
that the required information is furnished to the Internal
Revenue Service.
NOTE: FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM
W-9 MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS
MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
9. Withholding Under Section 1445. In addition to any
applicable backup withholding, under Section 1445 of the In-
ternal Revenue Code of 1986, as amended (the "Code"), the De-
positary will withhold 10% of the amount of any payments made
to foreign stockholders unless the Depositary receives from the
Company the documentation necessary to avoid the withholding
tax applicable to transfers of interest in a "United States
real property holding corporation" as defined in Section 897 of
the Code. There can be no assurance that the necessary docu-
mentation will be obtained. Non-foreign stockholders who want
to be assured of avoiding withholding under Section 1445 re-
gardless of whether the necessary documentation is obtained
from the Company must certify, under penalties of perjury,
their non-foreign status by completing the Section 1445 Cer-
tification included in this Letter of Transmittal. Individuals
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should complete Form A and entities should complete Form B of
the Section 1445 Certification.
Failure to complete the Section 1445 Certification will
not, by itself, cause Shares to be deemed invalidly tendered,
but may require the Depositary to withhold 10% of the amount of
any payments made pursuant to the offer. Any amounts withheld
under Section 1445 will be allowed as a credit against such
stockholder's United States federal income tax liability and
may entitle such stockholder to a refund, provided that the
Internal Revenue Service determines that the Company is not a
"United States real property holding corporation" and the re-
quired information is furnished to it.
NOTE: FAILURE TO COMPLETE AND RETURN THE SECTION 1445
CERTIFICATION MAY RESULT IN WITHHOLDING OF 10% OF ANY PAYMENTS
MADE TO YOU PURSUANT TO THE OFFER.
10. Requests for Assistance or Additional Copies. Re-
quests for assistance or additional copies of the Offer to
Purchase and this Letter of Transmittal may be obtained from
the Information Agent or Dealer Manager at their respective
addresses or telephone numbers set forth below.
11. Lost, Destroyed or Stolen Certificates. If any
certificate(s) representing Shares has been lost, destroyed or
stolen, the stockholder should promptly notify the Depositary.
Instructions will then be given as to what steps must be taken
to obtain a replacement certificate(s). The Letter of Trans-
mittal and related documents cannot be processed until the
procedures for replacing such missing certificate(s) have been
followed.
Facsimile copies of the Letter of Transmittal, properly
completed and duly executed, will be accepted. The Letter of
Transmittal, certificates of Shares and any other required
documents should be sent or delivered by each stockholder of
the Company or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its ad-
dresses set forth below:
The Depositary for the Offer is:
The Bank of New York
<TABLE>
<C> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange (212) 815-6213 Tender & Exchange
Department Department
P.O. Box 11248 Confirm by Telephone: 101 Barclay Street
Church Street Station (800) 507-9357 Receive and Deliver Window
New York, NY 10286-1248 New York, NY 10286
</TABLE>
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<PAGE>
Questions and requests for assistance may be directed to
the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers listed below. Additional
copies of this Offer to Purchase, the Supplement, this Letter
of Transmittal and other tender offer materials may be obtained
from the Information Agent as set forth below, and will be
furnished promptly at the Company's expense. You may also
contact your broker, dealer, commercial bank, trust company or
other nominee for assistance concerning this Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect)
(800) 735-3591 (Toll-Free)
The Dealer Manager for the Offer is:
Lazard Freres & Co.
One Rockefeller Plaza
New York, New York 10020
(212) 632-6000 (call collect)
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EXHIBIT 16
Summary of Terms
QVC Bridge Funding
Loan: QVC will make a bridge loan to QVC Pro-
gramming Holdings on arm's-length terms.
The QVC loan will be drawn down only after
$1.1 billion of bank financing (all
available bank financing), not reduced by
any fees or holdback, and all capital
contributions are used to purchase shares
tendered. The loan will be structured so
as not to be a margin loan.
Lender: QVC, Inc.
Borrower: QVC Programming Holdings, Inc.
Principal Amount: Up to $60 million,* drawn in one or more
installments. In addition, QVC will lend
up to an amount equal to $266 million,*
which represents the aggregate amount to
be received by the Company as the exercise
price of options exercised immediately
prior to the closing of the tender offer
(assuming all options are exercised).
Term: 2 months.
Interest: Prime Rate (to be defined) plus 2.00% per
annum, payable at maturity.
Subordination: The QVC loan will be subordinated to the
bank tender offer facility.
Security: The QVC loan will not be secured.
Condition Precedent: The QVC loan is conditioned on the tender
offer expiring no later than 12:00 mid-
night on February 9, 1995.
_____________________
* This amount assumes the tender of all of the shares issued
upon exercise of 100% of outstanding options as well as all
other outstanding shares (other than shares owned by QVC
Programming Holdings). To the extent that less than 100% of
such shares are tendered, the maximum aggregate principal
amount of the bridge loan will be reduced. Under no
circumstances will the amount of the loan, when added to the
amount, if any, required to fund the "rabbi" trust, exceed $326
million.
<PAGE>
EXHIBIT 17
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
AMENDMENT dated as of February 3, 1995 among QVC,
INC. ("QVC"), COMCAST CORPORATION ("Comcast"), TCI CABLE IN-
VESTMENTS, INC. ("Old Liberty"), LIBERTY MEDIA CORPORATION
("Liberty") AND QVC PROGRAMMING HOLDINGS, INC. ("Buyer")
W I T N E S S E T H :
WHEREAS, QVC, Comcast, Old Liberty and Buyer have
heretofore entered into an Agreement and Plan of Merger dated
as of August 4, 1994 (the "Agreement");
WHEREAS, the corporate name of Buyer was changed from
COMCAST QMERGER, INC. to QVC PROGRAMMING HOLDINGS, INC. on Au-
gust 5, 1994;
WHEREAS, the corporate name of Old Liberty was
changed from LIBERTY MEDIA CORPORATION to TCI CABLE INVEST-
MENTS, INC.;
WHEREAS, pursuant to the Agreement, Old Liberty has
heretofore assigned its rights under the Agreement to Liberty;
WHEREAS, the parties hereto desire to amend the
Agreement to provide for a new merger structure whereby Buyer,
rather than MergerCo (as defined in the Agreement), shall be
merged directly with and into QVC;
WHEREAS, the parties hereto also desire to amend the
Agreement to provide, among other things, that (i) QVC, rather
than Buyer, shall fund the "Rabbi" trust and (ii) QVC shall be
authorized to draw, or permit to be drawn, cash funds from the
"Rabbi" trust for the purpose of repurchasing any outstanding
QVC Stock Options after completion of the Offer; and
WHEREAS, the parties hereto desire to amend the
Agreement to permit QVC to lend Buyer funds in order to finance
certain costs of the Transactions.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless other-
wise specifically defined herein, each term used herein which
is defined in the Agreement shall have the meaning assigned to
such term in the Agreement. Each reference to "hereof", "here-
under", "herein" and "hereby" and each other similar ref-
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erence and each reference to "this Agreement" and each other
similar reference contained in the Agreement shall from and
after the date hereof refer to the Agreement as amended hereby.
SECTION 2. Amendments to the Agreement.
SECTION 2.01 Change of Merger Structure. The Agree-
ment is hereby amended such that the Merger shall be effected
by a merger of Buyer with and into QVC, after which QVC shall
be the surviving corporation, and shall not be effected by a
merger of MergerCo with and into QVC. Where necessary to
effect the intentions set forth in the preceding sentence and
the purpose stated in the fifth recital to this First Amendment
to Agreement and Plan of Merger (the "Amendment"), (i) refer-
ences in the Agreement to MergerCo are hereby deemed to refer
to Buyer, and (ii) all other appropriate changes are hereby
deemed to be made to the Agreement. Except as explicitly
provided in this Section 2.01, no other changes are deemed made
to the structure of the Merger set forth in the Agreement.
SECTION 2.02 Acknowledgement of Assignment. The
parties hereto hereby acknowledge the assignment by Old Liberty
of all of its rights under the Agreement to Liberty. This
acknowledgement and the referenced assignment shall not in any
way affect Old Liberty's obligations under the Agreement.
SECTION 2.03 Funding of the "Rabbi" trust. Section
6.10(b) of the Agreement is hereby amended to provide that QVC,
and not Buyer, shall establish and make the deposit of cash
funds into the "Rabbi" trust established pursuant to such sec-
tion. In addition, payments from the "Rabbi" trust will be
permitted prior to the Effective Time, in accordance with
Section 2.04(b) of the Agreement.
SECTION 2.04 Repurchase of QVC Stock Options.
Section 2.04 of the Agreement is hereby amended as follows:
(i) The text of such section shall now become Sec-
tion 2.04(a) of the Agreement; and
(ii) there shall be inserted a new Section 2.04(b),
which shall read as follows: "Notwithstanding any provision to
the contrary in either Section 2.04(a) or any other Section of
this Agreement, QVC is hereby permitted to accelerate unvested
QVC Stock Options at any time and to offer and to repurchase,
at a price equal to the difference between $46.00 per share and
the per share option exercise price, any QVC Stock Options
(whether or not then exercisable) which remain outstanding
after the acceptance for payment by Buyer (or a subsidiary of
Buyer) of Shares pursuant to the Offer. Such repurchase may be
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made with cash funds drawn by QVC (or paid to the option
holder) from the "Rabbi" trust referred to in Section 6.10(b)
of this Agreement (or QVC may be reimbursed for such repurchase
with such funds). It is hereby understood and agreed by the
parties hereto that no action taken by QVC permitted by this
Section 2.04(b) shall constitute a breach by QVC of any rep-
resentation or covenant of QVC in this Agreement."
SECTION 2.05 QVC Loan. The Agreement is hereby
amended to insert a new Section 1.13, which shall read as fol-
lows: "QVC Loan. Notwithstanding any provision to the con-
trary in the Agreement, QVC shall be permitted to lend, on
terms and conditions agreed to between QVC and Buyer, funds to
Buyer in order to finance the costs of the Transactions. It is
hereby understood and agreed by the parties hereto that no
action taken by QVC permitted by this Section 1.13 shall con-
stitute a breach by QVC of any representation or covenant of
QVC in this Agreement."
SECTION 3. Ratification of Agreement. The Agree-
ment, as amended by this Amendment, is hereby ratified, con-
firmed and adopted in all respects.
SECTION 4. Governing Law. Except to the extent that
Delaware Law may be applicable to the Merger and the rights of
the stockholders of QVC, this Amendment shall be governed by
and construed in accordance with the laws of the State of New
York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law.
SECTION 5. Counterparts; Effectiveness. This Amend-
ment may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original but all
of which taken together shall constitute one and the same in-
strument. This Amendment shall become effective as of the date
hereof.
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IN WITNESS WHEREOF, Comcast, Old Liberty, Liberty,
Buyer and QVC have caused this Amendment to be executed as of
the date first written above by their respective officers
thereunto duly authorized.
COMCAST CORPORATION
By/s/
Name:
Title:
TCI CABLE INVESTMENTS, INC.
By/s/
Name:
Title:
LIBERTY MEDIA CORPORATION
By/s/
Name:
Title:
QVC PROGRAMMING HOLDINGS, INC.
By/s/
Name:
Title:
QVC, INC.
By/s/ Neal S. Grabell
Name: Neal S. Grabell
Title: Senior Vice President,
General Counsel and
Corporate Secretary
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