Word: paramount
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Dates: during 1990-1999
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Watch a giant takeover brawl unfold before your eyes! Marvel at the clash of colossal egos! Gasp at the gyrating stock prices! Not since the 1980s has Wall Street so unabashedly savored a fight as it did the one that broke out last week for filmmaker Paramount Communications. With a bid from Viacom Inc. valued at $7.5 billion already on the table, QVC shopping-network chairman Barry Diller unveiled a staggering $9.5 billion counteroffer. Paramount stockholders could almost be heard sighing at the thought of their potential profits. In a counterassault with personal overtones, Viacom chairman Sumner Redstone fired back...
...advent of such an '80s-style fight had Wall Streeters in a spasm of nostalgia for a decade in which it seemed that deals had to be mean if they were going to be big. Propelled by Diller's bid and constant rumors of new suitors, Paramount stock rose 7 3/8 a share, to close at 75 7/8 last week. Arbitragers, who purchase the stock of takeover targets in the hope that deals will be completed, welcomed the battle and became voracious buyers. Fee- hunting investment bankers scrambled to draw other bidders into the fray and grab some...
...fight for RJR Nabisco) that burdened corporations with excessive debt, ignited newspaper headlines and enriched everyone from corporate raiders to takeover lawyers. "The only criteria were who won or lost and how the companies were split up," says Felix Rohatyn, a senior partner at investment banker Lazard Freres, Paramount's adviser. In that rapacious era, "we wouldn't look at a deal under $1 billion," says James Stewart, a former front-page editor of the Wall Street Journal and author of the best seller Den of Thieves. "That was for spot news...
However the Paramount fight plays out, Wall Street dealmakers don't expect a re-enactment of '80s-style takeover frenzy anytime soon. Debt remains a dirty word in many executive suites, and intense foreign competition has put pressure on companies to merge in ways that make sense for their long-term abilities to expand. "Nobody does a deal for what they used to call financial reasons any longer," says arbitrager Kalin. "The merger has got to fit in with your company." While the Paramount battle is happily reminiscent of the '80s, she adds, it will probably prove to be just...
...that extra-rational accumulation of wishful hunches and adrenal instinct that makes people finally just go for it. Since show-business executives are uncommonly sensitive to go-for-it twitches, it would have been weird if a competing bidder had not stepped in to turn the friendly merger of Paramount Communications and Viacom into the high-strung, insanely complicated struggle it became last week...