NEW YORK, Aug. 26 -- Barry Diller's Silver King Communications Inc. announced Monday it will buy cable-shopping giant Home Shopping Network Inc. for about $686 million in stock. The deal will give Home Shopping Network shareholders a stake of about 54 percent in Silver King. The merger marks the reunification of the two companies, which split in 1992, and supersedes Silver King's previous agreement to purchase Liberty Media Corp.'s controlling interest in HSN. The deal will merge HSN, which currently is received in about 69 million homes, with Silver King, which operates a dozen UHF television stations and is buying Savoy Pictures. HSN's assets also include the Internet Shopping Network, and video technology specialist Vela Research. HSN nearly merged three years ago with QVC Network, but the deal fell apart when QVC made an unsuccessful takeover bid for Paramount Communications Inc. Under the terms of the agreement, holders of HSN stock will receive 0.45 of a share of Silver King stock for each share of HSN Common Stock. Each share of HSN Class B Stock, which has 10 votes per share and is held solely by Liberty Media, will be converted into 0.54 of a share of Silver King Class B stock. Shares of HSN were up 75 cents to $12 a share in mid-session trading on the New York Stock Exchange while Silver King fell $1.50 to $28 in Nasdaq trading. Silver King and HSN shareholders must approve the deal. 'At no risk of overstatement, this is a complex transaction,' Diller said.
'I believe the combination will allow the companies the very best way to pursue their very aggressive individual agendas with clarity and without conflict.' Liberty Media, the programming affiliate of cable giant Tele- Communications Inc., will retain a 19.9 percent minority interest in HSN, which will be exchanged in a tax-free transaction for additional Silver King shares. Original Silver King shareholders other than Liberty Media will own 7.4 million Silver King shares. Former HSN will own 24.5 million Silver King shares and Liberty Media will own 9.8 million Silver King shares. Additionally, shareholders of Savoy Pictures Entertainment, which is being purchased by Silver King, will own approximately 4.2 million Silver King shares upon completion of that transaction. Diller is a longtime player in the entertainment industry and is best known for overseeing the creation of the Fox Network. Since leaving Fox in the early 1990s, he has headed home-shopping channel QVC and Silver King.
