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UPN received a major vote of confidence last week with Viacom's decision to exercise an option to buy 50% of the almost two-year-old network by Jan. 15, 1997.
Wall Street reacted favorably to the news, pushing UPN owner BHC's stock price up almost $2, to $102.875, on word of Viacom's decision. Viacom was down 25 cents the day of the news (Dec. 4) but recovered half that loss the following day, closing at $36.75.
Viacom has had the option, in exchange for some seed money and certain operational services, to buy half of UPN since its inception. Viacom notified BHC last Tuesday that it will exercise the option on Jan. 15, the day it is set to expire. The 50% stake will cost Viacom one-half of the aggregate cash contribution that BHC puts into the network through Jan. 15. Sources confirmed that BHC's total investment by then will be some $320 million, which would put the price of Viacom's half at about $160 million.
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