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Viacom Boosts Cash Offer for Rest of Spelling

Television: An earlier bid for the 20% owned by the public had been criticized as too low and provoked a lawsuit.

May 18, 1999| From Bloomberg News

NEW YORK — Viacom Inc., the world's fourth-largest media company, agreed to boost its cash offer for the 20% of Spelling Entertainment Group Inc. that it doesn't already own by 8.3% to $185.3 million.

Viacom said it will pay $9.75 a share for the Spelling stock held by the public, higher than the $9 it offered in March. The earlier offer drew criticism from some shareholders, who argued that the price was too low and sued to block the buyout. Viacom declined to comment on the lawsuit.

Viacom will operate Spelling, producer of such shows as "Beverly Hills 90210" and "7th Heaven," and its Big Ticket Television unit, which develops comedy programs, as part of its Viacom Entertainment Group division. Viacom said a 20-day tender offer for the shares will begin Friday, and shares not purchased in the offer will be acquired in a second-step merger at the same price.

The higher offer represents a 44% premium to Spelling's share price the day before the first offer was made in March.

Viacom's Class B shares closed at $37.81, down $1.44, while Spelling gained 75 cents to $9.63. Both trade on the New York Stock Exchange.

New York-based Viacom acquired most of its stake in Los Angeles-based Spelling in 1994, when it bought Blockbuster Entertainment.

Spelling's board approved the agreement after it was endorsed by a special committee of independent directors, the companies said.

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