CBS Inc. Chairman Thomas H. Wyman said today that new government restrictions on takeovers and defensive steps taken by CBS management have made the company safe from hostile takeover.
Last year, CBS defeated such a bid by Atlanta broadcast executive Ted Turner by exchanging $954.8 million of debt for its own stock and by limiting the amount of additional debt the company could assume.
Wyman, addressing securities analysts here, said that new Federal Reserve Board restrictions on the use of risky, high-yield securities known as "junk bonds" in hostile takeovers now protect CBS from certain types of bidders. He added that the combination of the Fed's actions and a new antitakeover statute in New York "provides substantial insulation for CBS."
Wyman also noted that the support of Loews Corp. Chairman Laurence A. Tisch, who owns about 12 percent of CBS, CBS founder William S. Paley, holding 8 percent, and CBS employes, with 3 percent, puts enough stock in friendly hands to deter many potential bidders. Tisch was invited to join the CBS board of directors and become a major stockholder last year so that he could exert a stabilizing influence after the turmoil at CBS during its 1985 battles with Turner and the politically conservative Fairness in Media group.
"The configuration of our stock ownership and balance sheet are different in important ways that make the company less attractive for many potential hostile acquirers," Wyman said. "The [takeover] rumor mill has slowed. . . . We have no evidence of any [stock] accumulation which causes us concern."
CBS is the only major television network that did not agree to be acquired by an outsider last year. While American Broadcasting Cos. Inc. agreed to be acquired by Capital Cities Communications Inc. and RCA Corp., parent of NBC, agreed to a merger with General Electric Co., CBS retained its independence by defeating Turner's bid.
"We are happy not to have joint tenancy at Black Rock [CBS headquarters in New York], a condition which we suspect is already the envy of the industry," Wyman said.
Wyman offered analysts some good news about CBS first-quarter earnings today. While most analysts had projected that the company would lose about 50 cents a share in the first quarter, Wyman said the company instead estimates a profit of 25 to 50 cents a share.
The three major factors in the performance above expectations are strong earnings from CBS records, one-time gains from a debt-reduction program, and improved broadcasting revenue, he said.