Financier Holds 8.7% of Network’s Stock : CBS Won’t Buy Back Boesky Stake

CBS Inc. said Tuesday that it had rebuffed a request last week from financier Ivan F. Boesky, the company’s largest shareholder, for a meeting to discuss a repurchase of his 8.7% stake in the company.

Boesky characteristically invests in companies known to be takeover or merger targets with the intention of turning a profit on short-term increases in their stock price, an activity known as risk arbitrage. On Monday, he disclosed his holding of 2.58 million shares of CBS stock. The second-largest block of CBS shares, 6.5%, is held by founder William S. Paley.

Boesky, in a filing with the Securities and Exchange Commission, disavowed any intention of using his stake to acquire control of CBS. In a statement issued Tuesday through a public relations firm, the investor said: “I wish to be supportive of CBS management and to encourage CBS to take action which would result in the market price of its stock more adequately reflecting its value. In that connection, I have requested an opportunity to meet with CBS management.”

He said he believes that “the current market price of CBS stock does not adequately reflect the value of CBS.”

But CBS, in a statement, said Boesky inquired last Wednesday “whether CBS would be interested in discussing the acquisition of his CBS shares; CBS advised that the company had no interest in doing so.” CBS also reiterated its position that it “has no intention to sell or merge the company.”

Boesky’s SEC filing disclosed that he made his purchases through his complex of investment companies between Feb. 27, when the stock sold for $81.50 a share, and Monday, when it went as high as $108.50. Based on his total expenditure of $247,139,078.73, he paid an average of $95.53 per share.

In trading Tuesday on the New York Stock Exchange, CBS shares closed at $106.75, down $1.25, on volume of 405,300 shares.

Not Known for ‘Greenmail’

Boesky’s motives in seeking a meeting with CBS executives are unclear. He is not known for seeking “greenmail,” the practice of some big speculators of asking companies to buy them out at a premium.

At the same time, much of the speculative activity in CBS stock in the last month was based on rumors of his purchases. Any steps he takes to quell expectations of his further activity might depress its price, cutting into his potential profit.

CBS stock has had a rapid run-up since March 1, when rumors began circulating of a possible bid for the company by Atlanta television magnate Ted Turner. Turner disavowed the rumors amid widespread skepticism on Wall Street about his ability to finance a CBS takeover, which could cost as much as $4 billion.

CBS stock has risen steadily since then, partly because of a merger and consolidation vogue within the broadcast industry. Speculation in many media stocks intensified after American Broadcasting Cos. and Capital Cities Communications Inc. announced their $3.5-billion merger--the first change in control of a television network--two weeks ago.

CBS has also been under largely rhetorical assault by Fairness in Media, a conservative group affiliated with Sen. Jesse Helms (R-N.C.), which says it wants to line up enough shareholders to influence the company’s news policies, which it describes as too liberal. The group this week began a $150,000 fund-raising campaign with a postal appeal to Helms supporters and other conservatives.

Although most Wall Street analysts believe that the difficulties in waging a hostile takeover campaign for CBS are virtually insurmountable, some note that the company has no significant anti-takeover defenses in its charter. CBS also has little long-term debt and no large block of shares in friendly hands.