Stalker Turns Prey Time Warner Offers $8.5 Billion For Turner Broadcasting System

Turner Broadcasting System Inc., until recently a stalker of media companies, was a target Wednesday of a deal that would make the cable industry’s showpiece property part of the world’s biggest media and entertainment company.

The Turner board is considering a takeover bid by Time Warner Inc., which sources said is offering stock worth about $8.5 billion for the company flamboyant showman Ted Turner built over the past quarter century.

Ted Turner is said to support the deal, apparently shelving his quest to add a broadcast network to his cable and entertainment holdings in favor of aligning his company with a much larger enterprise.

But the Turner Broadcasting chairman must convince Tele-Communications Inc., the nation’s biggest cable system operator and a big Turner shareholder, to approve the deal. The Englewood, Colo.-based company, which is headed by John Malone, declined comment.

TCI owns about 21 percent of Turner’s stock, while Time Warner owns about 18 percent. They each have three seats on the 15-member Turner board, and can veto major deals like this.

Time Warner and Turner confirmed Wednesday they were talking about a Time Warner offer to acquire Turner for stock and make it a wholly owned subsidiary.

They did not disclose terms, however, and cautioned that “significant issues remain to be negotiated.”

A deal would continue a merger frenzy in the media and entertainment industry this summer as program producers and distributors have teamed up in ever larger alliances in expectations that size will help them compete.

Some analysts said other bidders could appear for Turner Broadcasting, now that Ted Turner has signaled his intention to sell.

Among those mentioned are General Electric Co., which has talked with Turner in the past about combining its NBC division with Turner Broadcasting. Those talks broke off earlier this year when GE and Turner disagreed on who would have majority control.

Another possible bidder is Rupert Murdoch’s News Corp., which owns the Fox broadcast network and stations and the Twentieth Century Fox film studio. A News Corp. spokesman said the company “has no interest in Turner.”

But there are obvious advantages to a marriage of Turner with Time Warner.

Turner owns an impressive array of cable TV networks including Cable News Network and the Cartoon Network while Time Warner has the second-biggest collection of cable systems in the nation.

The combined company would also become a more powerful force in Hollywood, as Turner’s production companies New Line Cinema and Castle Rock Entertainment would supplement the output from Warner Bros. studios. Time Warner also owns the Home Box Office and Cinemax pay-TV channels that feature movies.