Management-Led Group Hikes Ante Again to Acquire Viacom

Locked in an escalating bidding war, a management-led group seeking to buy Viacom International sweetened its offer again Thursday for the cable, broadcast and TV programming concern.

Separately, Viacom reported that its income for the fourth quarter plunged 92%, to $700,000 on revenue of $246 million. For the full year, the company said it recorded a loss of $9.9 million on revenue of $919 million.

The management-led investor group valued its new offer at $49 a share, compared to an earlier offer that the group had valued at $46 a share. The management group boosted the cash portion of the bid to $38.50 from a previous $37, and the portion in exchangeable preferred stock to what it said was $8 a share from an earlier $7.

Under the revised proposal, shareholders will also receive a 25% stake in the new company, compared to an earlier 20% share. The company valued this stake at $2.50 a share, compared to the previous $2-a-share offer.

Analysts and arbitrageurs said the value of the offer was close to that of competitor National Amusements Inc., which last Monday sweetened its first bid.

One analyst, John Tinker of Bear, Stearns & Co., said he valued the management group’s latest bid at about $47.75 a share, compared to about $48.10 for the bid of National Amusements, a Dedham, Mass.-based theater chain.

“This may not be over yet, but I don’t know how much higher the Viacom group will want to go,” Tinker said, noting that the investor group’s first bid, made last year, had a face value of $42 a share.

Viacom blamed the 1986 yearly loss on its repurchase last May of a 7-million-share block of stock owned by Carl C. Icahn. Viacom took a $28.7-million charge to cover the cost of the repurchase.

The annual and quarterly results were not fully comparable to those of 1985 because of several acquisitions by Viacom. Among the acquisitions, Viacom purchased KMOV-TV in St. Louis last September, and the 33% share of MTV Networks that it didn’t own last March.