CBS Inc. yesterday amended its bylaws to defend itself against a hostile takeover attempt and denied that it has an agreement with General Electric Co. under which GE would become a friendly acquirer if the network faced a hostile takeover bid.
The CBS board of directors amended the company's bylaws so that a special meeting of shareholders can be called only by the chairman of the board jointly with the chairman of the board's executive committee; by a vote of a majority of the directors, or at the request of any two directors. CBS officials said the change was made to prevent a small group of stockholders from calling a special meeting to harass management.
A conservative group suported by Sen. Jesse Helms (R-N.C.) has said that one of its options in trying to gain control of CBS was to call a special stockholders meeting. Under the old bylaws, a special meeting could be called by 10 percent of the company's stockholders.
Meanwhile, CBS vigorously denied published reports that it has an agreement with GE under which GE would rescue CBS from a hostile raider by offering about $150 a share for the company.
"CBS has had no discussions with the General Electric Co., and that is unequivocal," said CBS Vice President William Lilley III. "There have been no negotiations with General Electric."
GE spokesman Jack Batty, declining comment, said GE has a policy of neither confirming nor denying speculative reports because "the first time we didn't deny one, you would know something was up."
Despite the strong denial by CBS, the company's stock hit a new high of 114 1/4 in trading yesterday, before closing at 111 3/4, up 2 1/8, as takeover rumors continued to swirl around the network.
CBS officials said yesterday's report of the agreement with GE was, in reality, a rumor planted by someone who wants to put pressure on CBS management.
But investment bankers who specialize in mergers and acquisitions said it would be "irresponsible" of Morgan Stanley & Co., CBS's adviser, not to contact companies such as GE that could act as friendly acquirers, in the event that CBS is faced with a serious hostile takeover bid.
On Wednesday, CBS officials and some Wall Street analysts said a published report that former Treasury secretary William Simon and MCI Communications Corp. had agreed to back a hostile takeover bid for CBS by broadcasting magnate Ted Turner also was a "planted rumor." MCI spokesman Gary Tobin said Wednesday there was no truth to the report. Simon refused to comment.
On Monday, the pressure on CBS increased after Ivan F. Boesky disclosed that he owns 8.7 percent of the company. CBS officials said they refused to meet with Boesky and also refused to buy his CBS stock.
Boesky said in a telephone interview with The Washington Post yesterday that he is happy to be a CBS shareholder and is confident that CBS management will take steps that will increase the price of the company's shares.
Wall Street analysts said yesterday there is little chance that a hostile bid for CBS would succeed, because the company is in a strong financial position and because CBS could bleed a hostile raider for several years by tying up the deal in complex legal proceedings involving the transfer of broadcast licenses.
CBS confirmed earlier this week that it has lined up a new $1.5 billion line of credit, leading some Wall Street analysts to speculate that CBS might make a major acquisition in the near future.
Other companies mentioned yesterday as possible merger partners for CBS included Walt Disney Productions, Coca-Cola Co., MCA Inc., American Express Co., Time Inc. and Twentieth Century Fox Film Corp. Most of those companies would have to divest certain operations before a merger with CBS could be approved by government regulators.
American Express Vice President Walter Montgomery said yesterday that his company is "not interested in acquiring CBS."
CBS management has been fighting for its independence since Jan. 10 when a conservative group backed by Helms said it would try to gain control of the network to eliminate what it believes is a "liberal bias" in the network's news coverage.
The Fairnesss in Media group said last week it would not launch a proxy fight at the CBS annual meeting on April 17, but FIM officials said the group has not ended its fight.
FIM founders R. E. Carter Wrenn and Thomas F. Ellis are officers of the National Congressional Club, the nation's second-largest political action committee, which supports conservative causes and candidates for political office.
Speculation that CBS might be sold has increased since Capital Cities Communications Inc. announced March 18 that it has agreed to acquire American Broadcasting Companies Inc. for more than $3.5 billion.