QVC Works to Clean Up Bid for Viacom; Won’t Raise It

QVC Network Inc. is working to remove all financial conditions attached to its hostile bid for Paramount Communications Inc., but sources said it won’t change its $90-a-share offer before a Delaware court decides whether Paramount has dealt fairly with QVC. A ruling is expected Monday.

QVC is competing for Paramount against Viacom Inc., whose $85-per-share tender offer for 51% of Paramount is set to expire at midnight Monday. However, Wall Street traders and lawyers predicted that the offer won’t be allowed to close pending an appeal of the Delaware decision.

QVC has asked a Delaware Chancery Court to overturn Paramount’s “poison pill” provision, which could make a takeover prohibitively expensive by flooding the market with new shares. QVC also wants it to scrap Paramount’s “lockup” agreements with Viacom, which add more than $700 million to QVC’s acquisition costs.

Meanwhile, QVC worked Friday to solidify agreements with lenders and a new investor, hoping to announce this weekend that its financing is no longer conditional. Until now, QVC has held off paying bank commitment fees, which could climb as high as $25 million.

Paramount’s board has rejected QVC’s higher offer, citing the uncertainty of many of QVC’s financial arrangements, including its “non-binding” memorandum of understanding with BellSouth Corp., which has pledged $1.5 billion toward the Paramount bid.

Paramount shares fell 62.5 cents Friday to close at $76.375 on the New York Stock Exchange. Viacom Class A shares fell $1.50 to $48.875, while Viacom Class B dropped $1.50 to $42.50. QVC inched up 37.5 cents to $50.75.