Spelling Entertainment Group Inc – ‘SC 14D9’ on 5/21/99 re: Spelling Entertainment Group Inc – EX-2

As of:  Friday, 5/21/99   ·   Accession #:  1047469-99-21893   ·   File #:  5-16325

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Tender-Offer Solicitation/Recommendation Statement   —   Schedule 14D-9
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 14D9     Tender-Offer Solicitation/Recommendation Statement    23    125K 
 2: EX-1        Agreement and Plan of Merger                          33    121K 
 3: EX-2        Opinion of Lazard Freres                               3     12K 
 4: EX-3        Letter to Stockholders of Spelling                     2     11K 

EX-2   —   Opinion of Lazard Freres

EX-2
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                                                              May 14, 1999

Special Committee of the Board of Directors                                     
Spelling Entertainment Group Inc.                                               
5700 Wilshire Boulevard                                                         
Los Angeles, California 90036                                                   

Dear Members of the Special Committee:                                          

       We understand that Spelling Entertainment Group Inc. (the "Company"),
Viacom International, Inc. ("Parent") and VSEG Acquisition Inc., a wholly owned 
subsidiary of Parent ("Purchaser"), propose to enter into an Agreement and Plan 
of Merger (the "Agreement"), pursuant to which Purchaser will commence a tender 
offer (the "Offer") to purchase all the issued and outstanding shares of the    
Company's common stock, par value $0.001 per share (the "Common Stock"), for    
$9.75 in cash, all as more fully provided in the Agreement. Pursuant to the     
Agreement, following consummation of the Offer, Purchaser will merge with and   
into the Company (the "Merger"), and each remaining outstanding share of Common 
Stock (other than shares of Common Stock held by Purchaser, shares of Common    
Stock held in the treasury of the Company and shares of Common Stock held by    
stockholders who demand appraisal for such shares in accordance with the        
Delaware General Corporation Law (the "DGCL")) will be converted into the right 
to receive $9.75 in cash, all as more fully provided in the Agreement. We       
understand that immediately prior to the consummation of the Merger, Parent will
contribute all of the shares of Common Stock beneficially owned by it to        
Purchaser. References herein to the "Consideration" are to the consideration to 
be received by the holders of the Common Stock in the Offer and the Merger and  
references herein to the "Transaction" are to the Offer and the Merger as       
contemplated by the Agreement.                                                  

     You have requested our opinion as to the fairness, from a financial
point of view, to the holders of shares of Common Stock (other than Parent and  
its affiliates) of the Consideration. In connection with this opinion, we have: 

   (i)      Reviewed the financial terms and conditions of the draft
Agreement dated May 14, 1999;               

EX-2
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         (ii)     Analyzed certain historical business and financial information
relating to the Company;                    

       (iii)    Reviewed various financial forecasts and other data provided
  to us by the Company relating to its business;

        (iv)     Held discussions with members of the senior management of the
                  Company with respect to the business, prospects, and strategic
objectives of the Company;                  

    (v)      Reviewed public information with respect to certain other
             companies in lines of business we believe to be generally
comparable to the business of the Company;  

        (vi)     Reviewed the financial terms of certain business combinations
             involving companies in lines of business we believe to be
 generally comparable to those of the Company;

      (vii)    Reviewed the historical stock prices and trading volumes of
the Common Stock; and                       

(viii)   Conducted such other financial studies, analyses and 
investigations as we deemed appropriate.    

    We have relied upon the accuracy and completeness of the foregoing
information, and have not assumed any responsibility for any independent        
verification of such information or any independent valuation or appraisal of   
any of the assets or liabilities of the Company, or concerning the solvency of  
or issues relating to solvency concerning the Company. With respect to financial
forecasts, we have assumed that they have been reasonably prepared on bases     
reflecting the best currently available estimates and judgments of management of
the Company as to the future financial performance of the Company. We assume no 
responsibility for and express no view as to such forecasts or the assumptions  
upon which they are based.                                                      

         Further, our opinion is necessarily based on economic, monetary, market
and other conditions as in effect on, and the information made available to us  
as of, the date hereof. In rendering our opinion, we did not address the        
relative merits of the Transaction, any alternative potential transaction or the
Company's underlying decision to effect the Transaction.                        

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EX-2
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        In rendering our opinion, we have assumed that the Transaction will be
consummated on the terms described in the Agreement, without any waiver of any  
material terms or conditions by the Company and that obtaining the necessary    
regulatory approvals, if any, for the Transaction will not have an adverse      
effect on the Company. We have also assumed that the definitive Agreement will  
not differ in any material respect from the draft thereof furnished to us. We   
were not requested to solicit third party indications of interest in acquiring  
the Company nor have we actively sought any other offers.                       

       Lazard Freres & Co. LLC is acting as investment banker to the Special
Committee of the Company's Board of Directors in connection with the Transaction
and a fee will be payable upon delivery of this opinion.                        

        Our engagement and the opinion expressed herein are for the benefit of
the Special Committee of the Company's Board of Directors and our opinion is    
rendered to the Special Committee of the Company's Board of Directors in        
connection with its consideration of the Transaction. This opinion is not       
intended to and does not constitute a recommendation to any holder of Common    
Stock as to whether such stockholder should tender its shares in the Offer or   
vote for the Merger. It is understood that this letter may not be disclosed or  
otherwise referred to without our prior consent, except as may otherwise be     
required by law or by a court of competent jurisdiction.                        

       Based on and subject to the foregoing, we are of the opinion that the
Consideration is fair to the holders of shares of Common Stock (other than      
Parent and its affiliates) from a financial point of view.                      

                           Very truly yours,

                                 LAZARD FRERES & CO. LLC

                                 By /s/ ROBERT E. HOUGIE
                                                --------------------------------
                                Robert E. Hougie
                                 Managing Director

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 14D9’ Filing		Date		First		Last			Other Filings
Filed on:		5/21/99							SC 13D,  SC 13E3,  SC 14D1
		5/14/99		1
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