NEW YORK— CBS Inc. agreed on Tuesday to be aquired by Westinghouse Electric Corp. for $5.4 bilion, the second of America's major television networks to change hands in as many days.
The Pittsburgh, Pennsylvania-based manufacturer of electrial appliances and products also owns a network that primarily broadcasts in radio, but has lacked the studio production facilities and skills that are the driving force behind the rearrangement of the entertainment industry signaled by Monday's takeover of Capital Cities/ABC Inc. by Walt Disney Co.
The offer, which could still be topped by another media conglomerate, would represent a sizeable profit for Lawrence Tisch, owner of CBS through Loews Corp., which has slimmed down and, in the opinion of media critics, destroyed what once used to be called the Tiffany Network for the quality of its news division and entertainment when it was run by William S. Paley.
The Westinghouse chairman, Michael H. Jordan, said he aimed to create "a premier broadcasting company not only in the United States but around the world" - words not too different from those used by Disney Chairman Michael Eisner in announcing Monday's takeover of ABC.
Mr. Jordan said he would manage and rationalize a new network of 15 television and 39 radio stations, with more than 200 television and 585 radio affiliates that reach one-third of American homes. Westinghouse, a pioneer in broadcasting which set up America's first radio station, KDKA, in its corporate hometown of Pittsburgh, has been known as an efficient and profitable but not imaginative manager of its network.
Mr. Jordan, a marketing specialist hired to manage Westinghouse two years ago after the company stumbled in many of its core businesses, had to convince Mr. Tisch that he could raise the cash to pay for the takeover.
Westinghouse will pay $81 for each share of CBS stock, raising the money by loans of $1 billion each from Chemical Bank and J.P. Morgan & Co., and the sale of $1 billion to $1.5 billion worth of assets. Mr. Jordan said a $3 billion tax credit from past losses and the company's own cash flow would be enough to pay down $2.5 billion of the cost within three years.
But Wall Street expressed its own caution about by marking down the stocks of both companies by a few cents when they resumed trading after the announcement. Few analysts were willing to comment for the record on the deal, but some doubted that Westinghouse could make it stick.
Aside from the financing, analysts said other media companies were circling CBS like sharks. Viacom Inc., which took over Paramount Pictures last year, and Seagram Co., which has just taken over MCA Inc., need outlets for their movies.
One analyst speculated that Westinghouse planned first to corral CBS and then offer stock in the company to one of thosemedia giants. Neither has a television outlet and a strategic alliance would offer movies - or "content" as they say in the trade - to the new Westinghouse/CBS network
