Westinghouse Rumored to Be Suitor for CBS : Buyout: Some analysts say a takeover would be financially infeasible. Others see logic in expanding present alliance.

Speculation about a takeover of CBS Inc. surfaced again Friday, adding a new name to the list of possible buyers of the troubled broadcast network and driving up its stock by nearly 6%.

Shares in CBS jumped $3.50, to close at $64.75, after financial reporter Dan Dorfman reported on CNBC that he had heard a rumor that the Westinghouse Electric Corp. was planning to make a $5-billion bid for the network, at a premium price of $80 a share. Dorfman said that Westinghouse, which owns radio and broadcast stations through its Group W Broadcasting unit, would sell $10 billion in assets, presumably industrial operations, to pay for the purchase.

Neither CBS nor Westinghouse would comment. Many analysts dismissed the report as the rumor du jour, referring to the wave of speculation about possible buyers, from Ted Turner of Turner Broadcasting System to Disney, since a deal with Barry Diller to buy CBS collapsed last summer.

While analysts predicted Friday that the network will be sold before fall, they were divided about whether Westinghouse is in a position to buy. The Pittsburgh-based company, whose core business is in defense, power and nuclear equipment, is rebuilding after a near-brush with bankruptcy, and analysts say it is more likely to sell assets to pay down debt that approaches $1 billion than to use those proceeds to enter the risky, competitive and fast-evolving network business. Westinghouse shares closed unchanged at $15.

There is also skepticism about whether Westinghouse or Group W management is up to the task of turning around CBS, whose ratings and earnings slipped seriously this year after losing stations, managers and rights to the National Football League to rivals. CBS fell to fourth in some critical ratings categories, after Fox, and is thought to have lost $1 billion in value since last May, before takeover rumors put a cloud of uncertainty over the company.

But some industry watchers say a CBS-Westinghouse combination might be a natural outgrowth of a pact that Westinghouse and CBS struck last summer. “I’m skeptical that Westinghouse would do this, but it’s not crazy,” said Harold Vogel, an analyst at Cowen & Co. in New York. “Westinghouse has stations and the deal with CBS. They may figure why not take the whole thing.”

Under the alliance between the two companies, Group W increased its CBS affiliate stations from two to five for 10 years, and formed a joint venture that it controls to purchase other stations, and to produce syndicated programming and sell local advertising time. Among other things, allying with a network helps Westinghouse secure an outlet for its programming, which has included “PM Magazine,” “The Mike Douglas Show” and “Vickie.”

For CBS, having Westinghouse control the partnership allows it to increase ownership of television stations, whose profit margins are often five times greater than those of networks. Federal regulations prevent the networks from controlling stations that reach any more than 25% of U.S. households.

The magic number to buy CBS apparently is $5 billion. That is the price Laurence Tisch, the chairman and chief executive of CBS, has put on the network. So far that price is too rich for Disney and Turner cannot raise it without a stock exchange that Tisch finds unpalatable.

While analysts say Tisch is eager to sell, and sooner rather than later because of the sinking status of CBS, they say he might get a better price for his 18% stake by waiting for the federal telecommunications bill to clear, which may happen this summer. The bill is expected to allow telephone companies into the broadcast business, potentially bringing companies like AT&T; and Bell Atlantic to CBS’s door.