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Ousted Chairman's Plan Reportedly Alienated Board : Shake-up Tied to Bid to Sell CBS

September 12, 1986|MICHAEL A. HILTZIK and PAUL RICHTER | Times Staff Writers

NEW YORK — Thomas H. Wyman precipitated his own ouster as CBS chairman and chief executive at a board meeting Wednesday by proposing a plan to sell the company as a defense against encroaching control by leading shareholder Laurence A. Tisch, sources close to the board said Thursday. The proposal crystallized opposition to Wyman's tenure, even among his supporters on the company's board. The result was Wyman's resignation and the appointment of Tisch, a CBS director, as acting chief executive of the company. William S. Paley, CBS' 84-year-old founder and a director and former chairman, returned as chairman.

Many board members were particularly irked at Wyman, sources said, for announcing without warning a sell-off plan during the meeting Wednesday. Some directors were also angered that Wyman would propose selling the company after having spent 18 months defending its independence from such takeover bidders as cable-TV owner Ted Turner and Marvin Davis, a Denver oilman.

Some sources indicated that Wyman's proposed buyer for CBS was Coca-Cola Co. A spokesman for Atlanta-based Coca-Cola confirmed that his company had been approached by representatives of CBS management but added: "Nothing of substance took place."

With the potential for a takeover of CBS vanishing, CBS stock fell $5.50 in New York Stock Exchange trading Thursday, closing at $134.50. The stock had fallen $2.75 the previous day on expectations of Wyman's departure.

Sources close to the board said that most directors had come to the regularly scheduled board meeting without any firm plans to shake up the firm's top management. Indeed, many thought that Wyman's future might not be decided for months, or until more was known about CBS' financial outlook. One Tisch ally on the board, Roswell Gilpatric, a prominent corporate attorney, predicted in August that Wyman's future at the company might be undecided until well into next year.

Other sources said that a majority of board members who had attended a private dinner late Tuesday, the night before the scheduled meeting, seemed to favor Wyman's remaining as chairman and chief executive. Tuesday's gathering did not include Wyman or Tisch.

"Their minds were changed at the meeting" the next day, said one source close to several board members.

By most accounts, the atmosphere at the eight-hour board meeting was decorous and businesslike. One director told acquaintances that the session "never got nasty or unpleasant."

Nevertheless, said another source, with stakes so high, "there had to be a lot of emotion at the meeting." And, when Wyman announced his plan, his supporters were deeply offended. Their reaction was "how dare he offer this company for sale without the board's permission?" the source said.

The directors spent as much as five or six hours of the meeting Wednesday discussing the proposal. The details of the plan are unclear, and investment professionals are divided on Coca-Cola's ability or inclination to acquire CBS.

Francis T. Vincent, the chairman and chief executive of the Columbia Pictures unit of Coca-Cola, is known to be a friend and admirer of Wyman. But, because court rulings, most recently in 1980, have barred television networks from producing most programming, Coca-Cola might have had to divest Columbia Pictures to acquire CBS. Still, many of those restrictions expire in 1990.

Other possible buyers whose names have been mentioned in recent days are Westinghouse Electric Co., Walt Disney Co. and Philip Morris Cos.

Selling CBS would presumably have worked to Wyman's advantage by eliminating the threat of Tisch's large shareholding, which amounts to just short of 25% of CBS stock.

Tisch's dissatisfaction with Wyman's management had reportedly grown in the months since he joined the CBS board earlier this year.

However, until Wednesday Tisch had not won a majority of directors to his side. Although Tisch seemed to be allied on many issues with Paley, Gilpatric and a fourth director, New York socialite and city planner Marietta Tree, Wyman seemed to have the support of three members he had placed on the board: James R. Houghton, chairman and chief executive of Corning Glass Works; Henry B. Schacht, chairman and chief executive of Cummins Engine Co.; and Edson W. Spencer, chairman and chief executive of Honeywell.

The remaining directors, whose inclinations were unclear, are Walter Cronkite, the former CBS Evening News anchorman; Michel C. Bergerac, former chairman of Revlon; Newton N. Minow, a Chicago attorney; James D. Wolfensohn, a private investor; former Defense Secretary Harold Brown, and Ford Foundation President Franklin A. Thomas.

Recent rumors suggested that, on Wyman's behalf, Wolfensohn had approached several companies as potential buyers of CBS. These included Westinghouse and Philip Morris, which refused to comment.

However, a source close to several board members said Wolfensohn was "his own man," who wanted to "play his cards the way he saw fit."

None of the directors would discuss the board meeting on the record.

Staff writer Kathryn Harris in Los Angeles contributed to this story.

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