Tentative Agreement Reached : Home Shopping Network May Buy COMB

Home Shopping Network Inc., a shop-at-home television network, said Tuesday that it had tentatively reached an agreement in principal to buy COMB Co., a consumer merchandising company, in a stock deal valued at $36 a share.

Home Shopping Network shows merchandise on television and encourages viewers to order it by telephone.

The network, available to 35 million households through cable and broadcast television outlets, has spawned countless imitators.

Under terms of the agreement, holders of COMB common stock will receive $36 worth of Home Shopping Network stock for each COMB share they own.

A merger would apparently give Home Shopping an additional source of merchandise as it expands in the rapidly growing video retailing business. COMB is a discount merchandiser that is a partner in another home shopping venture, Cable Value Network, with 17 cable system operators.

In a joint statement, the two companies said that an agreement in principle had been “structured” for the stock swap.

It said that the proposed agreement in principle had not yet been presented to the boards of either company.

Home Shopping Network launched a national shop-from-home program on cable television in the summer of 1985. Its programs are currently carried on cable and commercial broadcast outlets that can be seen in about 35 million homes. Its programs feature hosts who demonstrate products and encourage viewers to place orders by telephone.

In trading on the American Stock Exchange, Home Shopping stock jumped $5.75 to $32.50 a share before the exchange halted trading late in the session Tuesday pending the announcement. The stock split two for one on Tuesday.

In over-the-counter trading Tuesday, COMB rose $4.50 to close at $28.25 a share.

Theodore Diekel, chairman of COMB, said in the statement that the COMB board would consider the transaction within two weeks.

He also noted that “this proposed combination takes full advantage of the strength of each company and also enables the new operation to develop two unique video products--one for cable and one for broadcasting. With our buying organization, direct mail and cable merchandising and HSN’s distribution and systems expertise, the proposal makes real economic sense.”