Loews Hikes CBS Stake to 22.4%; Directors Sought Standstill Deal

Loews Corp. disclosed Monday that it has raised its stake in CBS Inc. to 22.46% in a move that seems certain to heighten tensions in the CBS board room.

A group of CBS directors last month sought unsuccessfully to wrest a “standstill” agreement from Loews over a private dinner meeting with Loews Chairman Laurence A. Tisch, sources said Monday.

In essence, several broadcasting executives confirmed a Wall Street Journal report that CBS directors invited Tisch, who is also a CBS director, to a July 8 meeting at an exclusive Manhattan club to try to glean his plans for CBS. The directors reportedly suggested in vain that Loews sign an agreement not to acquire more than 25%. They expressed concern, the Journal said, that Loews’ stock accumulation might be tantamount to a creeping tender offer.

Said He Intends to Buy 25%

At the time, Loews held 20.9% of CBS’ stock.

Tisch could not be reached for comment Monday. In past interviews, however, the Loews chairman has said that his company intends to buy up to 25% of CBS’ shares, which it began accumulating in July, 1985.

In an April interview, a Times reporter asked Tisch whether a 25% stake would grant Loews effective control of CBS.

“I stay away from that one, because I don’t know the answer. We intend to buy up to 25%, and what you want to call it is your problem,” Tisch said then. He added that he “never said to (CBS) that we would in any way make any agreement to limit ourselves to any number.”

In that interview, Tisch said he hoped to pass on Loews’ stake in CBS as a legacy to his children. Tisch and his brother Preston Robert together own about 24% of Loews.

Some investment bankers privately expressed amazement Monday that Loews’ investment in one of the nation’s three major networks has not triggered more of a brouhaha in the news media or among CBS board members.

‘Buying Control at No Premium’

Tisch would appear to be “buying control at no premium,” one banker said. He said colleagues in banking circles were very surprised that CBS directors had not sought a standstill agreement much earlier. “They are making their critical move a little too late,” he said.

According to the Journal, CBS Chairman and Chief Executive Thomas Wyman dined with the directors on July 8 but left by prearrangement before Tisch joined the session at the Links Club in Manhattan.

One broadcasting executive said differences apparently have arisen between Wyman and Tisch. “The two men were expected to be friends, and I don’t think it turned out that way,” he said.

Another broadcasting executive speculated that Wyman’s strongest support on the 14-member board may come from four CBS directors who serve together, in varying combinations, on three other boards.

Three CBS directors (Wyman, Franklin A. Thomas and Edson W. Spencer) are also trustees of the Ford Foundation, for example.

Three CBS directors are also directors of Cummins Engine Co. They are former Secretary of Defense Harold Brown, Cummins Chairman Henry B. Schacht and Thomas, the Ford Foundation president.

Wyman and Schacht are both directors of American Telephone & Telegraph, according to the latest CBS proxy statement to shareholders.

Efforts to reach many of these directors were unsuccessful Monday, and CBS spokeswoman Anne Luzzatto declined comment other than to say that the next CBS board meeting is not scheduled until Sept. 10.