BELLSOUTH, QVC ANNOUNCE PARTNERSHIP, ADDING $1 BILLION TO QVC'S PARAMOUNT WAR CHEST; LIBERTY MEDIA AGREES TO DIVEST QVC STAKE
ATLANTA, Nov. 11 /PRNewswire/ -- BellSouth Corporation (NYSE: BLS) and QVC (NASDAQ: QVCN) today announced that they have reached an agreement, contingent on QVC successfully completing its merger with Paramount Communications Inc. (NYSE: PCI), whereby BellSouth will purchase $1.5 billion in QVC equity securities, and BellSouth and QVC will form a joint venture to pursue opportunities in interactive television and communications. Under the agreement, BellSouth and QVC will form a joint venture to create, develop and offer interactive television services worldwide. The venture, which will be owned equally by BellSouth and QVC, plans to develop a broad array of new services, including interactive entertainment, electronic retailing, and movie, television and educational programming. In related developments, Liberty Media Corporation agreed to divest its interest in QVC if QVC's Paramount bid is successful, and has withdrawn from its agreement to invest an incremental $500 million in that bid. Liberty Media has reached an agreement with the staff of the Federal Trade Commission. Such agreement is subject to acceptance by the full commission. If commission approval is obtained, the Hart-Scott- Rodino waiting period relative to the QVC/Paramount transaction would be terminated. "This agreement with BellSouth, the largest and most profitable of the Bell operating companies, provides us a working alliance with a great and forward-thinking American company," said Barry Diller, chairman of the board and chief executive officer of QVC. "BellSouth, in combination with our partners in cable and publishing, Comcast, Cox and Advance, give us not only increased financial resources, but also significant and balanced strategic relationships throughout the media spectrum. If we can harness the intellectual resources of these companies, we should be able to compete effectively throughout the world as we proceed through this remarkable decade of entertainment and communications development." "We intend for this to be the beginning of a long-term partnership with QVC," said John L. Clendenin, chairman of the board and chief executive officer of BellSouth. "We believe in the movement to an interactive future. We're aligning ourselves with the right partners to make it happen. "With this agreement, BellSouth, QVC and its other partners will be building on their unique strengths to capitalize on this new industry," Clendenin said. "This alliance provides us with a valuable foundation to pursue other interactive entertainment opportunities and to capitalize on opportunities within electronic retailing and entertainment programming." "Comcast is delighted to be in partnership with BellSouth," said Brian L. Roberts, president of Comcast Corporation (NASDAQ-NMS: CMCSA). "Our combined technologies and delivery systems along with QVC, Cox and Advance will provide a distinct advantage in the race toward the new Information Age." The agreement, contingent on QVC's successful merger with Paramount, calls for BellSouth to purchase $1 billion of QVC common stock, or approximately 16.7 million shares, at $60 per share, and $500 million of QVC 6 percent convertible exchangeable preferred stock, convertible into approximately 7.6 million shares of QVC common. Consummation of the BellSouth purchase is subject to the execution of a definitive agreement and to certain regulatory approvals. These purchases would make BellSouth QVC's largest shareholder. BellSouth will designate three members of the QVC board of directors. Arrow Investments and Comcast Corporation have agreed with BellSouth as controlling shareholders, to vote their interests as a group. Additionally, each of the controlling shareholders will be permitted to acquire additional shares. If the proposed acquisition of Paramount is not completed, BellSouth will have the option for up to six months to purchase $500 million of QVC common stock at a price of $60 per share and to join the QVC stockholder control group. If the agreement is approved by the FTC and the Paramount merger takes place, under an agreement reached by Liberty Media with the FTC staff, Liberty Media will be required to divest its interests in QVC within 18 months after the Liberty consent decree becomes final. QVC has also agreed -- if Liberty Media so requests -- to compensate Liberty Media for any shortfall in the sale of its shares below $60 per share during the last four months of the 18-month divestiture period, or to purchase Liberty Media's shares at $60 per share not later than the end of the 18-month period. QVC operates home shopping channels that reach more than 48 million homes, with annual revenues in excess of $1.0 billion. BellSouth is an international communications services company. Its subsidiaries offer local telephone service in nine southeastern states, and wireless communications services worldwide, including cellular, paging and mobile data, provide advertising publishing services, and market and maintain stand-alone and fully integrated communications systems. -0- 11/11/93 /CONTACT: Media: Michael Rourke of QVC, 212-371-5999 or 215-429-8303; or Tim Klein, 404-249-4135, or Scott Ticer, 404-249-2824, both of BellSouth; Investors: William F. Costello of QVC, 215-430-8948, or Diana Brainerd of Abernathy/MacGregor/Scanlon, 212-371-5999, for QVC/ (BLS QVCN PCI CMCS)
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Liberty Media Corporation; Comcast Corporation; Arrow Investments ST: Georgia, Pennsylvania IN: ENT SU: TNM JVN
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