Loews Says It Now Has 24.9% Holding in CBS

True to its word, Loews Corp. on Monday increased its holdings in CBS to 24.9%--or “up to 25%,” as Loews Chairman Laurence A. Tisch vowed to acquire less than a year ago.

But the New York-based tobacco, hotel and insurance conglomerate gave no indication of its plans for the CBS investment in documents filed Monday at the Securities and Exchange Commission.

CBS Vice President Anne Luzzatto said the latest action “is still in keeping with our expectation that Loews would purchase 25%.” Luzzatto declined, however, to comment on recently published reports that Tisch was warned by the CBS board on July 8 that it would take defensive measures if Loews crosses the 25% line.

At the close of trading Monday on the New York Stock Exchange, CBS shares were priced at $138.25, up $4.12 1/2.

One investment banker said privately that if Tisch and CBS Chairman Thomas H. Wyman are at odds, as widely rumored, “Wyman’s going to have to try to find some kind of an ally.”

Since Wyman was tapped by CBS founder William S. Paley in 1980 to be his successor, five new members (in addition to Tisch) have joined the 14-member board and might be presumed particularly loyal to present management.

Wyman also appears to be on good terms with at least two of the longer-term CBS board members, Cummins Engine Chairman Henry B. Schacht and Ford Foundation President Franklin A. Thomas, serving alongside each man on other boards.

One-Year Terms

But CBS directors are elected to office for one-year terms, according to the proxy statement furnished earlier this year to shareholders. By CBS’ own definition, a change of control occurs if the board’s majority membership changes over a two-year period.

“I think it’s all over but the screaming and the shouting,” said one broadcasting executive, drawing on his own experience in mergers and takeovers. He postulated that from Loews’ perspective, “the smartest thing is just to do nothing. Stay cool. . . . Eventually the directors defect. People you think are your loyal supporters (change) once they discover . . . who the boss is, and it ain’t Tom Wyman.”

Added another veteran broadcasting executive, requesting anonymity: “I think it’s pretty clear Tisch is not satisfied with Wyman and he’s going to make a change. I can’t imagine (Wyman staying) longer than the rest of this year.”

If CBS’ stock continues to trade at its recent prices, and a change of control does occur, Wyman could reap considerable profits. Under the terms of his employment agreement, Wyman could immediately surrender “stock appreciation rights” to 62,500 shares of CBS common stock. They give Wyman the right to receive a cash payment from CBS equal to the difference between $79.50 (the closing price of CBS stock on Feb. 13, 1985) and the closing market price on the date the rights are surrendered.

Wyman may also surrender all of his stock appreciation rights if someone becomes the beneficial owner of 25% or more of CBS’ stock.