QVC Network said Sunday that it won't improve its bid for Paramount Communications - a move that risks letting rival bidder Viacom walk away with the entertainment giant.
But QVC chief Barry Diller told Reuters he isn't admitting defeat: "I'm not conceding anything . . . I absolutely believe we have the best bid."
QVC, a home-shopping service, is offering $ 10.4 billion in cash and QVC securities for Paramount. But Wall Street favors Viacom's lower $ 9.7 billion bid, largely because it includes more cash and offers some protection if Viacom stock performs poorly. QVC is offering no such protection.
Paramount shareholders have until midnight tonight Eastern time to commit to sell their stock to Viacom or QVC.
Whichever bidder gets 50.1% of Paramount shares wins. If neither does, the 5-month takeover battle could start over Tuesday. Otherwise, Viacom seems all but certain to win.
Last week, QVC hinted that it might come back with an improved offer after today. The possibility of another bid might have kept some investors from tendering their shares to Viacom today and kept QVC in the running.
That appears less likely now. QVC said in a statement Sunday that it had bank financing for another, higher bid. But "we chose not to use it. We said we would not bid above the prudent value for (Paramount) and we haven't. We said we would not compromise the integrity of our company and its stock and we haven't."
QVC's statement sounded like a concession speech. But Diller told Reuters he's still lobbying shareholders to tender to QVC today. S.G. Warburg analyst Lisbeth Barron agrees QVC shouldn't be written off.
She says long-term investors might be impressed enough by Diller's concern for the long-term health of his company to support QVC. "He's taken the high road," she said. Still, Barron admits Sunday's statement "might be a losing strategy."
QVC certainly sounded willing to walk away: "We hope we will be judged as much for what we would not offer as by what we have offered."
