Wall Street Expects Higher Bid For Cbs

Westinghouse Electric Corp. has lined up more than enough financing commitments to complete its $5.4 billion purchase of CBS Inc., banking sources said Thursday.

It may need the extra money. With Ted Turner reportedly considering making a rival $6 billion bid, Wall Street is betting that the price tag for CBS will be higher than the $81 a share Westinghouse has agreed to pay.

For the first time since CBS and Westinghouse announced their deal Aug. 1, CBS shares rose Thursday above the agreed buyout price - a sign that some traders expect the ultimate buyout price will be higher.

CBS rose $1.37-1/2 to close at $81.37-1/2 a share Thursday on the New York Stock Exchange.

“The Street thinks there is going to be a second bid,” said John Tinker, media analyst for Furman Selz. “The issue then becomes does Westinghouse increase its bid.”

One of the banking sources, speaking on condition of anonymity, said banks have committed $12 billion in financing to the Westinghouse bid for CBS.

Westinghouse will need $7.5 billion in financing to buy CBS for $81 a share, assure itself of adequate working capital and refinance existing bank lending agreements, the sources said.

Westinghouse declined to comment on how much bank financing has been committed so far but spokesman Kit Newton said the effort was “going well, ahead of schedule.”

Asked for Westinghouse’s reaction to rumors that Ted Turner would launch a competing bid for CBS, another Westinghouse spokesman, Roy Morrow, said “nothing will diminish our resolve to do whatever is necessary to close this deal and create this nation’s leading broadcast company.”

Tinker, the media analyst, said the disclosure of financing progress indicated Westinghouse wants “to move as fast as it can” to pre-empt another bidder.

He said the odds are Turner would bid, but added “you never know.”

Turner Broadcasting System Inc. has called a special board meeting for Monday to discuss issues surrounding its chairman’s efforts to arrange a bid for CBS, a source said Thursday.

The Atlanta-based media and entertainment company, parent of the CNN network, declined to comment on a board meeting or on a report in The Los Angeles Times that Turner was assembling a $6 billion cash bid for CBS.

But a source familiar with the situation, speaking on condition of anonymity, said a phone meeting of the Turner board was set for Monday and it was likely the CBS situation would be discussed.