QVC’s Diller Just Says No to Higher Bid : Mergers: Despite an increase in Viacom’s offer, the home shopping network’s chairman says he’ll stand pat.

QVC Network Chairman Barry Diller said Monday that he does not plan to increase his bid for Paramount Communications Inc., despite Viacom Inc.’s move last week to boost the cash portion of its offer for the entertainment company.

QVC is still in the lead, with a cash-and-stock offer valued at $500 million more than Viacom’s bid at the close of trading Monday. But Wall Street traders said they expect Viacom to improve the non-cash portion of its bid before Jan. 21, when the current tender offers are set to expire.

The four-month battle for Paramount has taken a toll, Diller acknowledged.

“Even though the process is wildly enervating, I still think Paramount is a great opportunity. But the bids are in, and let the public decide. As for me, I’m finished,” Diller said in an interview in Los Angeles.

“The truth is, it has gone on much too long,” he added. “I think all this noise obscures the issue that is most important, which is getting on with the management of the business.”

Meanwhile, Viacom spent much of the day defending its plan to acquire both Blockbuster Entertainment Corp. and Paramount in the face of harsh Wall Street reaction to its plans. Viacom A shares tumbled $4.25 to $41.875, while Viacom B dropped $2.75 to $38.25.

Initially, Wall Street was exhilarated by the news Friday that Viacom would boost its cash offer for 50.1% of Paramount to $105 per share. But traders later were vexed to learn that Viacom was reducing the securities offered for the remaining 49% of the company.

One analyst said the maneuver was “just not cricket,” adding that he thought it hurt Viacom Chairman Sumner Redstone’s credibility in the financial community.

But other traders happily predicted a higher bid will come from Viacom, now that it has reached a merger agreement with Blockbuster. “They bought themselves another two weeks,” said one stock speculator. “This isn’t a winning bid.”

Neither QVC nor Viacom are expected to take dramatic action this week, while they wait to see how their shares are valued by Wall Street--and how Paramount’s board reacts at a scheduled Wednesday meeting.

In the meantime, however, sources in the Viacom camp discouraged the notion that they would boost their bid, but they worked hard Monday to defend their actions at a media conference hosted by Smith Barney Shearson, Viacom’s leading investment banker.

In a presentation at the conference in La Quinta, Viacom Chief Executive Frank Biondi Jr. said Viacom and Blockbuster could save about $100 million in overhead expenditures through a merger and increase their future revenue by an estimated $150 million. If Paramount is acquired, Viacom would expect to reduce overhead by an additional $100 million.

In a conference call with analysts and investors, Blockbuster Chairman H. Wayne Huizenga said there was nothing to prevent a third party from bidding for Blockbuster, although he doubted that would happen.

Huizenga said he and other Blockbuster executives would vote their 22.5% stock holdings in Blockbuster in favor of a merger with Viacom.

Blockbuster shares eased 25 cents to $28 Monday, after trading as low as $26.25. Paramount slid $1.875 to $77.375, while QVC lost $1.375 to close at $39.25. Under the rules of the Paramount auction, the tender offers must expire by Feb. 14. Those rules--accepted by both QVC and Viacom--effectively require the companies to make their final offers by the end of January, since securities laws require an extension of 10 business days if a tender offer is increased.

Like Diller, Redstone previously has expressed a great reluctance to bid more for Paramount. But Redstone could not be reached Monday for comment.

Unlike Redstone, however, Diller had never participated in a takeover battle until he made QVC’s unsolicited bid last September, with initial backing from Tele-Communications Inc. Chief Executive John D. Malone. After antitrust regulators objected to TCI’s role, Malone withdrew, allowing BellSouth Corp., among others, to step in as an investor.

Times staff writer James Bates contributed to this story.

* FRUSTRATING FIGHT

Arbitragers long for the days when milking mergers was easy. D4