Viacom Inc has really thrown the Paramount Communications Inc bid ball back into QVC Network Inc’s court because while the total value of its new bid of $107 a share for 50.1% of Paramount shares is little changed, the company is now guaranteeing the value of the paper element, offering a bundle of four different securities for the other 49.9% of the equity: the four securities are 0.93065 of a Viacom non-voting Class B common share; Viacom preferred stock; a three-year warrant to buy Viacom shares at $60 a share; and a contingent value right that provides extra compensation to Paramount holders if Viacom B shares trade below $48 a share a year after the acquisition and Viacom can extend the timetable to provide for the added value if Viacom trades below $51 after two years or $55 after three years; the the protection won’t cover any drop below $38 a share, prompting sniping from QVC, because Viacom B closed Tuesday at $37.75 a share.
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