Paramount Communications Inc. is expected to review QVC Network Inc.'s $9.6-billion purchase offer next week, after the home shopping giant Tuesday disclosed $4 billion in financing commitments from banks and investors.
At the same time, sources said QVC is in negotiations with several telephone companies over a possible cash investment. Tele-Communications Inc. Chief Executive John Malone, who holds a stake in QVC through an affiliate, was also said to be considering ways to bolster QVC's bid for Paramount.
Paramount on Tuesday acknowledged that it received financing documents from QVC and would review them, but it declined to comment further. However, sources close to the company predicted a meeting will take place next week and that discussions could even be authorized with QVC if the board determines the financing package is solid.
Paramount previously said its board would consider QVC's unsolicited offer only after QVC proved it had sufficient financing. QVC is led by former Paramount and Fox Inc. executive Barry Diller.
Observers predicted that QVC's disclosure will put added pressure on Viacom Inc. Chairman Sumner Redstone to sweeten his offer for Paramount, possibly by increasing the amount of cash Paramount shareholders would receive. Viacom agreed last month to buy Paramount in a cash and stock offer now valued at about $8 billion.
QVC's offer to Paramount stockholders includes about $3.6 billion in cash. Its financing package, unveiled Tuesday, includes $3 billion committed by six banks at $500 million each and $1 billion in funds committed by two equity partners.
Led by Chemical Banking Corp., QVC's banking group also includes North Carolina-based banking giant Nationsbank, Canadian lenders Toronto Dominion Bank and Bank of Nova Scotia, Great Britain's Barclay's Bank and Long Term Credit Bank of Japan.
The equity partners' $1 billion consists of $500 million each in commitments from Philadelphia-area cable firm Comcast Corp. and Liberty Media Corp., which is controlled by Malone.
Redstone, whose company operates the MTV and Showtime cable networks, has resisted raising the ante, saying he sees no reason to restructure his offer.
But in the meantime, Redstone has been busy adding $1.8 billion to his potential arsenal in the takeover battle--$1.2 billion from regional telephone company Nynex Corp. and $600 million from video giant Blockbuster Entertainment.