Word: deale
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Dates: during 1980-1989
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Steven Ross, 61, had been up late into the night helping to reassemble the pieces of the biggest deal of his life, but he was feeling particularly ebullient at noon the next day. As he met with reporters last Friday, the chairman of Warner Communications playfully handed out black-and-yellow Batman lapel pins, a promotional item for his studio's big summer film. Shunning a chair, the executive casually plopped himself down on the floor and began extolling the deal he hoped to see through. Said he: "There could not be a better fit in the world...
...stock swap with Warner, and instead launched a $70-a-share tender offer for 100 million of Warner's nearly 200 million shares. That would buy Time a controlling interest in its merger partner; the remaining Warner stock will be acquired later in exchange for cash and securities. The deal will cost Time the kind of debt it and Warner had hoped to avoid -- somewhere between $7 billion and $14 billion. Unlike the original Time-Warner arrangement, the initial acquisition will not need the approval of Time shareholders because the first part of the transaction will involve only cash...
...latest agreement replaced a March merger proposal that called for Time to acquire Warner in a swap of 0.465 shares of Time stock for each Warner share. But some on Wall Street had complained that the deal gave Time shareholders no immediate financial reward. "The marketplace has told us we can do better," said Time's Nicholas, 49. "We're still acquiring Warner, but now we're using cash." Nicholas acknowledged that the combined company's earnings would suffer in the short run, but he argued that the company's value will be evident to anyone who examines its assets...
Critics of the deal complained that it would not quickly raise Time's stock to the level of Paramount's bid. "Time management had a plan to build an empire, and somebody threw a wrench into that plan by offering the shareholders a better price," said Ralph Whitworth, director of the United Shareholders Association, a Washington-based advocacy group. "It should have been left up to the shareholders to decide" how to vote on Paramount's proposal. Disappointed Time stockholders may be inclined to bring lawsuits accusing the company of failing to look after their immediate interests. Said...
Some investors nonetheless expressed outspoken support for the deal. Said Gordon Crawford, a money manager at the Los Angeles-based Capital Group, the largest institutional owner of Time shares: "If you put Time and Warner together, you have what I think will be the greatest media and entertainment company in the world. I would rather be a long-term owner than cashed out of one of the world's most exciting companies at $175 a share." Concurred Kendrick Noble, who follows media companies for the Paine Webber investment firm: "After all the smoke blows away and we can look...