Viacom Buyout Group May Sell Some TV Stations

A management group planning a buyout of Viacom International said Monday that it is considering the sale of some of the company’s broadcast stations to pay off the $615-million bank debt that the buyout will incur.

In a disclosure statement filed in Washington with the Securities and Exchange Commission, the group said any such sales would probably take place within a year after the buyout. Preliminary terms of the bank financing from Manufacturers Hanover Trust Co. and Bankers Trust would require the sales, the filing said. However, it added, “there can . . . be no assurance that such sales will occur” because loan terms are subject to further negotiation.

Viacom owns five television stations, all CBS or NBC network affiliates, in St. Louis; Hartford, Conn.; Shreveport, La., and Albany and Rochester, N.Y. The company also owns five radio stations in New York, Chicago, Washington, Houston and Memphis, Tenn. Among Viacom’s other holdings, not subject to the management group’s sale plans, are the MTV and Showtime/The Movie Channel cable networks.

The management group, which includes President and Chief Executive Terrence A. Elkes, Executive Vice President Kenneth F. Gorman and five other top executives, made a surprise buyout bid on Sept. 16, offering $40.50 per share, or $2.73 billion. Most of that sum would come from bank borrowings and the sale of so-called junk bonds.

The group owns 7.82% of Viacom’s stock, including that held by the investment firms of Drexel Burnham Lambert; Donaldson, Lufkin & Jenrette; First Boston, and Equitable Life Assurance Society, which are affiliated with the management.

Investment professionals give the group the inside track to acquire Viacom, as no superior bids have surfaced in the last two weeks.

“Judging from the market activity, people seem to have run out of hope that anyone’s going to come in with a higher bid,” said Mara R. Miesnieks, an analyst for Smith Barney, Harris Upham. Viacom closed at $40.375 a share, down 25 cents, in trading Monday on the New York Stock Exchange.

A spokesman for another large owner of Viacom Stock, the investment partnership of Gollust, Tierney & Oliver, said his group has not yet come to any conclusion over the fairness of the management buyout bid. But the spokesman, General Partner Augustus K. Oliver, said a counterbid by his group “is not something that’s very likely at this time.” The group owns a 12.04% stake in Viacom.