Word: viacom
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Dates: during 1990-1999
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That blunt, five-word concession statement rang down the curtain last week on one of the hardest-fought and longest-running takeover sagas in American corporate history. It came after Viacom Inc., best known for its ownership of MTV, won an overwhelming victory in the epic five-month battle for control of Paramount Communications, garnering more than 90% of Paramount shares soon after the polls closed in the proxy contest. In doing so, Viacom takes home some of the crown jewels of entertainment, including the Paramount film and television studios and a library of 890 movies ranging from Wayne...
This is the story of how Viacom won the battle and how Diller, one of the toughest and savviest Hollywood wizards, let the prize slip away. It is also the story of shattered careers, plunging stock prices and looming corporate shake-ups, all of which are part of the true cost of Viacom's $9.8 billion victory...
Time was running out on the Viacom executives and advisers who hunkered down to a Sunday-afternoon skull session in the well-appointed 49th-floor midtown- Manhattan offices of Robert Greenhill, the chairman of investment firm Smith Barney Shearson. Four days earlier, on Jan. 12, Paramount directors had spurned a sweetened Viacom bid and backed a $10 billion merger with Barry Diller's QVC home-shopping network. Unless Viacom came back fast and hard, everyone present knew, the fight would soon be over...
...rejected, Greenhill turned to one of his whiz-kid investment-banking strategists, Michael Levitt, 35, who described a scheme he said would blow away Diller. The novel plan called for issuing a type of security, called a contingent value right, CVR, or "collar," that would guarantee the value of Viacom's bid if Viacom stock failed to reach a certain price level within three years of the merger. The guarantee could cost Viacom an extra $1 billion or so under the worst scenario, but if the stock hit or surpassed the target, the collar would cost the company nothing...
...board of Paramount Communications recommended that shareholders reject Viacom's latest bid and again advised that they accept QVC Network's offer, estimated to be more generous by about $600 million...