Successful defenses against takeovers in the network and cable television industries

During the mid-1980s, several network and cable television companies were faced with hostile takeover bids. With deregulation by the Federal Communications Commission and the realization that network and cable television assets had been undervalued, such companies attracted the attention of acquisition-minded suitors. The period January 1984 to October 1986 was studied to determine how a company in the industry became a target and defended itself.

A case study approach was used to examine six television companies which successfully defended against hostile takeover bids. Data were collected from newspapers, periodicals, and the annual reports of the companies studied. Telephone interviews were attempted with corporate public relations officers of the respective companies, although only one interview was completed.

The results showed that FCC deregulation left network and cable television companies as vulnerable as other businesses when it came to being targeted for hostile takeover. Investor awareness that network and cable television assets were undervalued made companies in this industry even more likely than other companies to attract suitors. When the regulations of the Securities and Exchange Commission and anti-trust legislation were not enough to protect companies in the industry from takeovers, these targets implemented defenses similar to those of other businesses in attempting to avoid being taken over.