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Chris-Craft stock jumps
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June 6, 2000: 8:15 p.m. ET
Reported merger talks with Viacom boost TV station owner's shares 10 percent
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NEW YORK (CNNfn) - Shares of Chris-Craft Industries Inc. rose sharply Tuesday amid new speculation that the television station owner may be bought by media conglomerate Viacom Inc., with which it had shared ownership of the emerging UPN network.
Chris-Craft (CCN: Research, Estimates) shares jumped as high as 69, or more than 10 percent, Tuesday afternoon on the New York Stock Exchange, boosted by reports that Viacom (VIA: Research, Estimates) had restarted talks to acquire Chris-Craft's television-station group, which operates 10 TV stations in major U.S. markets.
 Chris-Craft shares closed at 67-13/16, up 5-7/8 on Tuesday. Viacom shares dipped 1-11/16 to 64-1/16.
A TV-station deal between the two companies has been valued at as much as $3.5 billion, according to a Wall Street Journal report citing people familiar with the talks. New York-based Chris-Craft was forced last month to sell its 50 percent stake in UPN to Viacom for $5 million.
Representatives of Viacom and Chris-Craft were unavailable for comment Tuesday afternoon.
Looser rules on the number of stations media companies can own in large markets have made the former boat builder a takeover target in recent months. Previous talks between the company and Viacom, which recently completed its mega-merger with CBS Corp., broke down over price and because of a legal battle over the now-defunct UPN partnership, the newspaper said.
The company reportedly was talking at one point to News Corp. (NWS: Research, Estimates), owner of 83 percent of the nation's No. 4 network, Fox Entertainment Group. (FOX: Research, Estimates).
UBS Warburg analyst Kurt Billick said a deal between Chris-Craft and Viacom would follow through with Viacom's growth plans.
"Viacom has made it very clear that they see the advantages of duopoly," Billick said from San Francisco, referring to a company's ownership of two TV stations in a major city. "I think they see Chris-Craft as a good candidate for pursuing that strategy."
 Chris-Craft owns stations in large cities including Los Angeles, San Francisco, Phoenix and Orlando, and most carry UPN programming. The company also has subsidiaries that make plastic film products for the chemical and health-care industries.
The Federal Communications Commission last week said it would propose a new rule allowing companies to own more than one television broadcast network, potentially allowing Viacom to keep both CBS and UPN.
Thanks to the CBS deal, Viacom now owns stations reaching some 42 percent of the American audience, a point that could hinder any pairing with Chris-Craft, which reaches about 19 percent.
 Networks currently are prohibited from reaching more than 35 percent of the total national audience. Were Viacom to buy Chris-Craft, it might have to divest some stations to comply with the rules.
But Billick suggests such a deal may take a while to complete, as the players haggle over the final price tag.
"I don't think Viacom is going to overpay for assets, and the guys at Chris-Craft are pretty tough negotiators," he said, alluding to the on-again, off-again nature of the reported talks. 
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Chris-Craft Industries
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