Boards Ponder Turner Buyout Time Warner, Turner Officials Meet To Hammer Out Details Of Proposed $8 Billion Deal

Time Warner Inc. and Turner Broadcasting System Inc. called their boards into session Thursday in hopes of getting an agreement on an $8 billion offer to make Ted Turner’s cable empire a part of Time Warner.

But sources familiar with the matter said the board meetings on the proposed stock swap may prove inconclusive and that additional meetings may be required before a final vote.

The sources, speaking on condition of anonymity, said no announcement is expected until today at the earliest.

Time Warner Chairman Gerald Levin has proposed swapping newly issued Time Warner stock for the 82 percent of Atlanta-based Turner Broadcasting it does not already own. It would keep Time Warner’s ranking as the world’s biggest media and entertainment company.

Even as the board meetings approached, there were signs that some Turner board members may be pushing for more concessions for their support.

The Los Angeles Times reported Thursday that new demands from two big cable system operators that hold seats on the Turner board, Comcast Corp. and Continental Cablevision Inc., could delay action on the deal.

The story, citing an unidentified source, said the two cable system operators wanted the same terms that cable mogul John Malone has been given.

Malone, who is chief executive of Tele-Communications Inc., controls about 21 percent of Turner stock, has three seats on the board and can effectively block deals of this magnitude involving Turner Broadcasting.

But he is believed to have thrown his support behind the deal after winning concessions over the past few weeks including long-term deals for carrying Turner channels on TCI systems.

Comcast declined comment on the newspaper report and calls to Continental were not returned. Time Warner and Turner Broadcasting had no comment.

Time Warner’s telephone partner, US West, has told Time Warner it must approve the Turner deal but Time Warner disagrees and planned to proceed with or without the phone company’s approval, said sources speaking on condition of anonymity.

US West, the regional phone company based in Englewood, Colo., owns a 25.5 percent stake in Time Warner Entertainment, which owns the Warner Bros. studios, HBO pay TV network and cable systems.

It fears Time Warner would have a conflict on what to do with promising projects if it owns all of Turner Broadcasting’s movie production companies and cable networks but only 74.5 percent of Time Warner Entertainment’s Warner Bros. studios and HBO channels.

A Turner-Time Warner merger would likely face government scrutiny.

Critics say they are disturbed that the nation’s biggest cable system operator TCI will have a stake of any kind in the second biggest, Time Warner.

They also say the long-term deals that TCI and others may win to carry Turner networks on their systems may drive prices higher for other operators.

In trading Thursday, Time Warner was off 75 cents a share at $39.75 on the New York Stock Exchange while Turner Class B shares were down 50 cents a share at $29.12-1/2 on the American Stock Exchange.