Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 20, 1995 TAG: 9509200048
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
Time Warner owns 18 percent of Ted Turner's cable and entertainment empire and is proposing to buy the rest for about $8 billion in stock.
Turner is said to like the deal, which would leave him as Time Warner's biggest shareholder at more than 10 percent and as its vice chairman overseeing his old company, led by Cable News Network, and other video operations.
Time Warner has been dickering over the terms for nearly three weeks with key Turner shareholder John Malone, head of Tele-Communications Inc., the nation's biggest cable-system operator. Malone controls 21 percent of Turner and has been pressing for concessions.
Sources close to the deal said Time Warner chairman Gerald Levin has won Malone's support on key issues. Lawyers were working on shaping an agreement that both sides hoped to present to their boards late this week or early next week. The companies all declined to comment.
At a cable TV industry reception Tuesday night in New York, Turner replied, ``No,'' when asked for an update on the talks.
The Wall Street Journal reported Tuesday that US West had threatened to take legal action to block the deal on grounds that it would violate the terms of the phone company's 1993 investment in part of Time Warner.
US West paid $2.5 billion for a 25.5 percent stake in Time Warner Entertainment, which includes the Warner Bros. film and TV studios, the HBO pay-television service and the second-biggest cable TV system group.
Time Warner's stake in Atlanta-based Turner Broadcasting isn't part of the entertainment partnership, but US West is said to be concerned that the Turner deal could result in changes for HBO, in which it does have a stake.
Lois Leach, a spokeswoman for US West, declined to comment on the company's conversations with Time Warner or to speculate on what it may do.
``The proposal continues to change shape, and some of the changes could have implications for the Time Warner Entertainment partnership ... We are watching to see how it shapes up,'' she said.
According to one source close to the deal, Ted Turner would supervise HBO operations but HBO would remain a separate entity.
US West and Time Warner have been working for months without much success on restructuring the entertainment partnership, possibly isolating the cable systems and reuniting Warner Bros. and HBO with the parent company. The talks have bogged down on who would control the cable systems.
by CNB