Word: merger
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Dates: during 1980-1989
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Others expressed anger that the Time directors had refused to go along with the Paramount bid, which could deliver a windfall to Time stockholders. There were also expressions of concern about the debt of up to $14 billion that will burden the Time-Warner combination. Although the initial merger deal had been hailed for being debt-free, Time Chairman J. Richard Munro argued that the cash flow of the two companies will be adequate to service the debt. "We hope we can avoid layoffs and asset sales," he said. "The best way to pay off the debt will be through...
...move was calculated to turn up the heat on Time, which had rejected Paramount's initial bid two weeks ago and instead pressed ahead with its planned merger with Warner Communications. To that end, Time and Warner on June 16 converted their original debt-free stock swap into a leveraged takeover bid in which Time would buy Warner for a total of up to $14 billion in cash and securities, a step that, among other things, eliminated the need for the deal to be approved by Time stockholders...
...raising the stakes, Paramount acknowledged that its takeover proposal is conditional to, among other things, Time calling off its acquisition of Warner and rescinding the share exchange already executed and on Paramount's ability to obtain adequate financing. To cover the cost of acquiring Time's stock and meet merger-related expenses, Paramount said it expects to secure $14 billion in bank loans and raise $1.6 billion through the sale of high-interest junk bonds...
...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...
Paramount attacked the revised Time-Warner merger agreement as "a defensive device, pure and simple. From the standpoint of Time shareholders," the company said, "we don't see how it begins to compare with our offer of $175 a share in cash for all shares." Declared Paramount's principal investment banker, Robert Greenhill of Morgan Stanley: "We consider this a very weak response." Paramount repeated an earlier offer to negotiate a higher price, and declared, "We will continue our efforts to acquire Time Inc. with firm determination...