E N E T ® Paramount Communications Inc.–1993 Steven N. Kaplan University Of Chicago A t the end of August 1993‚ Sumner Redstone‚ Chairman of the Board of Directors of Viacom‚ sat back and wondered what to do about Paramount Communications. He had been pursuing the acquisition of Paramount for some time but seemed to have reached a road block. Beginning in 1989‚ Redstone and Martin S. Davis‚ Chairman of the Board and Chief Executive Officer of Paramount‚ had held informal discussions
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Case Study Questions –Paramount Communications Inc. 1993- Why a paramount is a takeover target? Several Strategic Reasons - Cost reduction: through combinations of similar business and economy of scales - Sales increase: a) cross-promotions of each company’s brand and utilization of each company’s channels‚ and b) cooperation in international businesses. 2. Which of the two firms (Viacom or QVC) would make a better fit with Paramount? -Viacom: Overlap in the business creates
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PARAMOUNT AS A TARGET WHO IS INTERESTED MORE ? BIG DIVERSIFIED MATURED BRANDED 1 BACKGROUND PARAMOUNT COMMUNICATIONS ESTABLISHED PRESENCE: TYPE OF BUSINESS: • Entertainment/Motion Picture production and distribution 1934 Worldwide Gulf & Western previously‚ name changed after acquisition of Paramount Pictures TYPE: HQ: Public NYC‚ New York‚ US • Publishing 2 BACKGROUND VIACOM ESTABLISHED PRESENCE: TYPE OF BUSINESS: • Networks • Cable Television • Entertainment
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1. WHY IS PARAMOUNT A TAKEOVER TARGET? Paramount is a potential merger target to Viacom and QVC for a few key reasons outlined below: Paramount & Viacom: (1) Synergy creation: The businesses of both companies are famous and highly complementary to each other. (2) Cost reduction: Paramount & Viacom both have economies of scale and are doing business in a similar industry. (3) Addition of enhanced and complementary distribution capabilities‚ which will significantly increase revenue. (4)
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buy shares in a public limited company. Public Sector: organisations are owned and controlled by the government or local government. They aim to provide public services‚ often free at the point of delivery e.g. the NHS and the police force. About QVC QVC is a virtual shopping centre where customers can shop for quality merchandise 24 hours a day‚ seven days a week via television‚ telephone or computer. Their goal is to exceed the expectations of our customers by offering unique and innovative products
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Paramount 1994 1.) On December 14‚ Paramount’s board dropped the merger agreement with Viacom and agreed to hold an auction for control of Paramount. The implication of this move was that although Paramount would endorse one of the two bids‚ the shareholders’ tender decisions ultimately would decide the winner. 2) 3.) (Refer Chart “Stock Price Movements” in appendix.) Before the announcement‚ (on September 7)‚ Paramount stock traded at $55.875 per share. From that point‚ Paramount stock reached
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PARAMOUNT 1994 CASES IN CORPORATE FINANCE July 12‚ 2013 Board of Directors Paramount Re: Acquisition Dear Board of Directors: In order to make our recommendation to the Board‚ we must address the following questions: Acquiring Paramount Communications‚ Inc (PCI) was important for Redstone as it would enable Viacom to obtain a stronger position in the communications industry. His initial offer was designed to show that Viacom was a better strategic
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Paramount Communications Inc. Question 1 Paramount is a takeover target because other firms see synergy value associated with combining Paramount’s assets and operations with their own. Specifically‚ Paramount has several assets that complement other media companies. Value in the media is generated through several different channels. As a media company‚ Paramount has a presence in most of the entertainment sectors (see Exhibit 2). There seems to be a drive toward consolidation and several industry
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Case QVC Author: NA HG495 – Case Analysis Instructor: NA Abstract This case analysis will be focused on the company QVC (Quality‚ Value‚ and Convenience). We will perform an analysis review‚ which‚ will provide a comprehensive insight into the company’s historical and current business structures‚ strategies and efficiencies in their operations. It will include a detailed SWOT Analysis (Strengths‚ Weaknesses‚ Opportunities and Threats) (Humphrey) and the primary activities of the Value Chain
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Class: MG 316 QVC is a very successful cable shopping network compared to its competitors. Over-time‚ it has become very profitable as shown in Exhibit 1‚with a higher profit margin in comparison to Home Shopping Network( HNS)‚ QVC’s major competitor. QVC as the initials imply stands for quality‚ value and convenience. These three words communicate to all stakeholders the organization’s values‚ inspirations‚ mission and goals. However‚ the success of QVC does not only depend on those three promises
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