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Viacom Agrees to Settle Suit With Spelling Shareholders Over Buyout

Media: It will boost its offer by $17.9 million, or 75 cents a share, after group said it was shortchanged.

September 28, 2000|From Bloomberg News

WILMINGTON, Del. — Viacom Inc., the world's No. 3 media company, agreed to pay more than $18.4 million to settle shareholder suits over its buyout of Spelling Entertainment Group Inc., court papers say.

In March 1999, New York City-based Viacom offered $9 a share, or $167 million, for the 20% of Spelling it didn't already own. The acquired company, creator of television shows such as "Beverly Hills 90210" and "7th Heaven," was founded in 1989 by TV producer Aaron Spelling.

A group of Spelling shareholders sued in Delaware Chancery Court in Wilmington, claiming they were being shortchanged in the buyout. Viacom officials agreed after negotiations to add 75 cents per share, or $17.9 million, to their offer.

"While the plaintiffs believe that the claims asserted in the [suits] have merit, they also believe the settlement provides a substantial benefit [to investors]," lawyers for the shareholders said in court papers filed today.

Viacom officials weren't immediately available for comment.

Viacom also agreed to pay as much as $575,000 to cover shareholders' legal fees, court papers show.

The agreement still must be approved by Chancery Court Chief Judge William B. Chandler III after a hearing later this year.

Viacom's media tentacles stretch in many directions, from its Paramount Pictures movie studio to the CBS and UPN television networks to book publisher Simon & Schuster.

Viacom's shares fell 50 cents to close at $56.56 in trading on the New York Stock Exchange.

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