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Universal sheds TV unit
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October 20, 1997: 10:41 a.m. ET
Parent of Home Shopping Network to acquire stations for $4.075 billion
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NEW YORK (CNNfn) - Universal Studios Inc., a subsidiary of Seagram Co. Ltd., said Monday it is merging its television assets with those of HSN Inc., the parent of television's Home Shopping Network, in a stock deal valued at $4.075 billion.
Universal will receive 45 percent of HSN's outstanding common shares plus $1.2 billion in cash.
Once the deal is complete, HSN Inc. will change its corporate name to USA Networks Inc. Barry Diller will continue as its chairman and chief executive officer.
"This merger provides an extraordinary opportunity for Universal to further enhance the value of its television assets, including our cable networks, under Barry Diller's leadership," said Edgar Bronfman Jr., Seagram's president and chief executive officer.
HSN will receive all of the domestic operations and 50 percent of the international operations of USA Network, the Sci-Fi Channel and Universal Television's U.S. production and distribution operations. Those assets will be combined with HSN's Home Shopping Network and its interest in Ticketmaster Group Inc.
Universal will retain ownership of its television library, comedy production business and international television production and distribution operations. HSN and Universal each will own 50 percent of a newly-created international television joint venture.
In accordance with Federal Communications Commission rules, Universal Studios' 45 percent interest in HSN will be held in a subsidiary that will also include HSN's non-broadcast assets. That interest will be exchangeable into an equivalent percentage of HSN shares.
Universal also agreed not to increase its equity above 45 percent for a four-year period, although there are unspecified exceptions to that provision.
Once the deal is complete, Liberty Media will own 15 percent of the company and could increase its stake to 25 percent.
--Cyrus Afzali
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USA Networks
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