In a last-minute effort to thwart the merger of CBS Inc. and QVC Inc., Comcast Corp. stunned the entertainment industry last night by announcing an uninvited bid to take over QVC.
Comcast, the nation's third-largest cable television company and a minority shareholder in QVC, was unhappy that QVC Chairman Barry Diller was aligning his cable television home-shopping channel with a network broadcasting company. Comcast, which owns 15.5 percent of QVC, is reluctant to have an interest in the over-the-air television business.
The bid by Comcast to acquire QVC for $2.1 billion was announced yesterday evening as the CBS and QVC boards were preparing to meet today in New York to vote on a merger agreement.
But CBS Chairman Laurence A. Tisch, reached by telephone last night at a board dinner at CBS headquarters in Manhattan, indicated that Comcast's move had effectively scuttled the QVC merger. "I think the merger discussion is at an end," he said. "Simple as that."
QVC officials said their board would consider Comcast's offer at its meeting today. Mr. Diller did not return telephone calls last night, but QVC released a statement that quoted him as saying, "All the ironies aside, I said at the outset that if someone wanted to bid for QVC, we would, of course, deal with it, and we will, with the only consideration being the best consideration of the QVC shareholder."
Comcast's president, Brian Roberts, said last night that his company simply did not want to be minority investors in CBS. Federal rules prohibit a cable company from owning more than 5 percent of a television broadcaster.
The Comcast offer, worth approximately $44 for each share of QVC stock, is higher than the terms of the CBS-QVC merger, which values QVC stock at about $38 a share.
Since the CBS-QVC merger plan was announced 12 days ago, Comcast executives have indicated privately that they were not happy with the deal, which they viewed as taking QVC away from its core cable business and into a competing industry. But the depth of Comcast's unhappiness was not apparent, even to QVC's management, until late yesterday.
Mr. Diller was said by several people close to him to be stunned when he learned that Comcast, long his ally, had now become a spoiler in the deal of his career.
Although the Comcast bid was seen as a hostile move uncharacteristic of the company, it is not unusual for Comcast's father-and-son management team of Ralph and Brian Roberts to be near the center of the deal-making that has preoccupied the telecommunications industry.
Several years ago the two men helped finance the creation of QVC Network, which rapidly grew to match the size of the Home Shopping Network and now has revenues of more than $1 billion. It was Brian Roberts who in 1992 persuaded Mr. Diller to become chairman of QVC after Mr. Diller resigned as chairman of Fox Inc.