Chris-Craft Jumps as Viacom Talks Reportedly Resume
Justin Dini
06/06/00 - 04:07 PM EDT
Updated from 8:43 a.m. EDT Shares of broadcast station owner
Chris-Craft Industries (CCN Quote) rose sharply Tuesday on signs that the on-again, off-again talks between Chris-Craft and
Viacom (VIA Quote) appear to be back on again.
The two companies, which first began
flirting with a possible acquisition of Chris-Craft by Viacom in January, have returned to the negotiating table, the
Wall Street Journal reported Tuesday.
Chris-Craft jumped 5 3/4, or 9%, to 67 11/16 in late day trading. Viacom fell 1 11/16, or 3%, to 64 1/16.
Officials of Viacom and Chris-Craft did not return calls for comment.
Still, what makes a deal more likely this go-round is that Viacom
agreed in March to buy out Chris-Craft's 50% stake in the
UPN network for $5 million, resolving a legal battle between the two companies and giving Viacom full ownership of the fledgling network.
Viacom, which just completed its merger with
CBS, is hungry for Chris-Craft's 10 TV stations because in many cases, owning those stations will give Viacom duopolies, or ownership of two stations in the same market. Under
Federal Communication Commission regulations, no company can reach more than 35% of the viewing public, but duopoly rules allow a company to own two stations in a the same market without it counting as an increase of the broadcaster's national reach.
Viacom currently reaches 42% of the country, but if it is able to own two stations in big cities such as New York and Los Angeles, it could swap out of cities in which it doesn't have duopolies, thus reducing its reach to comply with the FCC rules.
TV stations are also cash cows, and increasingly account for a huge chunk of TV network profits.
A deal to acquire Chris-Craft has been valued at around $3.5 billion, though price was reportedly a sticking point in the first round of negotiations between the two
