National Media, ValueVision Terminate Merger Agreement

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National Media Corp., Philadelphia, and ValueVision International Inc., Minnesota, mutually terminated their merger agreement as the May 31 deadline to finalize it lapsed.

Although the two companies had touted the marketing synergies of the combined companies in electronic retailing, ValueVision shareholders did not favor merging with an infomercial marketing company that has not posted a profit in more than a year. The companies had been attempting to renegotiate merger terms since April 8, when a group of ValueVision shareholders rejected

the original merger terms and announced their intent to exercise dissenter's rights under Minnesota law.

"The merger may not have gone through, but that doesn't mean we still can't continue discussions with each other," said Bruce Goodman, a spokesperson for National Media. The company issued a statement saying that management decided that terminating the original merger agreement would be in the best interest of shareholders and also "allow other potentially interested parties to make a proposal, free of the non- solicitation and break-up provisions of the former agreement."

"While we continue discussions and may yet reach an equitable agreement with ValueVision," said Robert N. Verratti, CEO of the company. "The National Media board of directors felt it was important to open a window to allow for other potential interested parties to negotiate freely with the company."

Other merger suitors have not appeared, although rumors once abounded that rival infomercial marketing company Guthy-Renker Corp., Palm Desert, CA, was interested in the possibility of a merger. National Media has the largest distribution network throughout the world, reaching 370 million TV households. Guthy-Renker is in the process of negotiating terms of a $30 million investment from News Corp., the global media giant that owns 37.5 percent of the company. Guthy-Renker executives also have discussed the possibility of acquiring other direct marketing companies through equity swaps of News Corp. stock.

National Media will hold its annual meeting of shareholders on Aug. 14 in Philadelphia. It expects to report is financial results for the year ended March 31 next Monday.

Meanwhile, ValueVision formally announced the appointment of Gene McCaffery as its chief executive officer and a member of the board of directors. McCaffery has worked in retail and marketing for 25 years. Prior to joining ValueVision, he was CEO and managing partner of Marketing Advocates, a marketing and product development company in Los Angeles. He was also senior executive vice president of Montgomery Ward & Co. Inc.

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