Word: warner
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...offer of about $35 a share for tbs stock, which had been trading at around $24, was a boon for Turner shareholders, but the potential benefit for the buyer was the more controversial point. "This is an absolutely natural fit for Time Warner,'' says PaineWebber analyst Christopher Dixon, who stresses the success of Turner's programming in foreign markets. Other analysts, including Edward Froelich of Pershing & Co., are less impressed, partly because the heavily indebted Time Warner will be financing the deal by issuing an additional 189 million shares of stock, there by increasing the outstanding shares 50% and threatening...
Unlike Disney's lightning-quick buy of Cap Cities, the Time Warner-Turner deal is a work in progress. At week's end, at Time Warner's Manhattan headquarters, negotiations proceeded urgently. But the very announcement set off Wall Street speculation that other moguls, such as General Electric chairman Jack Welch and News Corp. chief Rupert Murdoch, would enter the bidding for Turner. But Murdoch denied any interest; and GE indicated that while it would not try to break up this deal, it remained interested in Turner if the Time Warner acquisition failed. Says Harold Vogel, a media analyst...
...Saturday, Aug. 19, Levin and his wife flew to Montana for lunch at Turner's ranch. His wife, Jane Fonda, drove out to the local airport to meet the Time Warner business jet while Turner made sure lunch was ready. That day Levin laid out the details of the offer, which was the best deal Tur ner had seen for selling the company he had been building for more than 25 years...
...that pitch was only half the battle. The following week Levin summoned Time Warner president Richard Parsons from his vacation for a trip to Englewood, Colorado, where the two executives made their overture to the other major party in the deal, cable king John Malone, whose Tele-Communications empire owns 21% of tbs and holds three seats on its board...
Malone, a notoriously hard bargainer, has a large say in the deal since he could become one of the largest shareholders of Time Warner by virtue of his stake in TBS. One reason he may support it is that it increases the value of his company's investment in tbs by $670 million. But he may also want a sweetener. "Malone is a genuine genius,'' says Tom Southwick, pub lisher of Denver-based Cable World magazine. "His frictionless mind will find a way to make this work to satisfy his own shareholders.'' He is bargaining, for example, to ensure that...