	talking point viacom international via a bidding war for viacom international inc one of the largest u s entertainment companies pitted a management group and other investors against national amusements inc a closely held theater operator both sides raised their bids over the weekend a source close to the management side insisted that timing was on his side he said if outside directors approve the management proposal a merger plan could be put to a vote of shareholders with proxy material going out late this week it would take days from the day we mail said the source the source predicted national amusements controlled by investor sumner redstone would need half a year to complete a tender offer because of the regulatory approvals that must accompany any change in control of viacom s broadcast licenses and cable television franchises redstone was not available for comment some of wall street s arbitrage players said it was a rare situation that could only be enjoyed a true bidding war one said redstone could begin a tender offer whenever he wanted and if enough people were convinced his proposal was superior to the viacom management plan he would have a chance to win the independent directors of viacom were called into a meeting today word on a decision was expected early tomorrow viacom shares climbed to by midafternoon one major wall street firm issued a sell recommendation we think we re at the end now in terms of bidding said the firm s arbitrageur who spoke on condition he not be identified both redstone s proposal and the management proposal would create a restructured company heavily leveraged with debt the management plan would result in a balance sheet with about billion dlrs in debt and nearly mln dlrs in preferred stock convertible into pct of the common stock redstone s newest proposal offers holders dlrs in cash a fraction of a share of exchangeable preferred stock with a value of dlrs and one fifth of a share of common stock stock of arsenal holdings representing pct of the equity interest in the restructured viacom one arbitrageur calculated the equity in the redstone plan was worth dlrs making the total package worth dlrs per share management offered dlrs in cash exchangeable preferred stock worth dlrs and a fractional share of convertible preferred the arbitrageur said the equity portion was worth about dlrs for a total of dlrs redstone s newest plan raised the amount of interest he would pay on the cash portion of his offer for every day beyond april that a merger with arsenal is not consummated the plan calls for intest to be paid at an annual rate of nine pct during may and pct thereafter previously redstone offered eight pct interest other arbitrageurs said both redstone and the management group led by president and chief executive terrence elkes were offering high prices redstone really wants to own the company one said another said management seemed to have the edge on the timing issue redstone s company owns pct ov viacom s mln shares a wall street analyst said it was hard to determine what the equity in the newly leveraged company would be worth he noted as an example that new stock in fmc corp fmc which adopted a highly leveraged structure last year inititally traded at dlrs per share dipped to nine dlrs and is now just over dlrs last week viacom reported fourth quarter earnings fell two two cts per share from cts the company said interest costs from several uisitions affected results shares of warner communications inc wci rose to analysts noted warner owns warrants to purchase mln viacom shares at dlrs and another mln shares at dlrs chris craft industries ccn which owns a stake in warner rose to viacom was created in and spun off from cbs inc cbs the company has cable television subscribers operates nine satellite television services and owns television and radio stations it is one of the largest distributors of films and other programs for television reuter 
