By  on February 1, 1994

NEW YORK -- Value Vision International, a plucky Minnesota-based home shopping network intent on rapid growth, is doing whatever it can to achieve it.

The company, which had sales of $40 million last year, has made an unsolicited offer to buy National Media, a Philadelphia-based infomercial giant with revenues of $170 million.

The merger attempt represents the urgency with which small to medium-sized home shopping networks are trying to fortify their positions at a time when available cable channels are scarce and a flock of newcomers such as Q2, Spiegel's Catalog 1 and TV Macy's are poised to launch.

Industry analysts said Value Vision's offer is not as unlikely as it seems. Value Vision, which is traded on NASDAQ, is growing fast. Analysts believe the company will do $100 million to $170 million next year.

"Value Vision's gains are no bigger than the gains QVC made in its early years," said Mark Riely, a principal of MacDonald, Grippo, Riely.

"National Media has more in the way of sales, but if the two companies were to continue to be run independently, Value Vision would eclipse National Media's sales," said one Wall Street analyst.

Part of Value Vision's expansion strategy includes broadcast TV stations to deliver its own home shopping programming, as well as news and public affairs shows. So far, the company has bought four stations. It also moved to larger quarters in December.

Value Vision, which was started by veterans of the defunct shopping network CVN, falls somewhere between HSN and QVC stylistically and in terms of merchandise.

Riely said a merger could be good for both companies because there are a lot of synergies between the infomercials and home shopping businesses. In addition, Value Vision and National Media could cut costs by sharing an order-taking and fulfillment facility, he said.

Value Vision could also use National Media's subsidiary, Quantum International, which delivers infomercials in Europe, to enter overseas markets.

"National Media has fairly extensive operations in Europe that account for 30 percent of its revenues," said Riely. "That's appealing to any home shopping company that wants to break into the European market."So far, National Media has given Value Vision the cold shoulder. On Friday, the company rejected Value Vision's offer of $10 per share for 50.1 percent of National Media's common shares.

"In terms of corporate gamesmanship, if National Media feels they're going to be sold, they'd like to get the highest price," Riely said. "They may be trying to see if they can roust up some other bidders."

Other corporate gamesmanship relates to the executives of the companies involved. Riely said Value Vision has been discussing a partnership with Buckeye Communications, a marketing services and entertainment production company in New York. Buckeye is run by Mark Hershhorn who was formerly National Media's president and chief executive officer, so there may be some rivalry there.

Michael Hammond, National Media's president, was previously president of Revlon North America. Industry sources said that Ronald O. Perelman, chairman of Revlon, has been actively buying stock in National Media. Perelman has already acquired 37 percent of Guthie-Renker, a Palm Desert, Calif., infomercial company.

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