Time bid in court

Press, 26 June 1989, Page 29

Time bid in court

By Skip Wollenberg of the Associated

Press (through NZPA) New York Paramount Communications has asked a Federal Court to dismiss a law suit filed by Time Inc. in an effort to thwart Paramount’s hostile SUSIO.7 billion (SNZIB.4B) take-over bid. At the same time, Paramount asked the U.S. District Court in New York to block Time’s SUSI 4 billion tender offer for Warner Communications Inc.

The legal salvo was the latest in a series of increasingly bitter exchanges between Paramount and the allied Time and Warner, which are locked in a fight to create one of the world’s largest communications companies. On Wednesday, Paramount asked Delaware Chancery Court to block the Time bid for Warner. A hearing on that case was set for July 11. In its response to Time’s suit in the Federal Court in New York, Paramount fought suggestions that its take-over

of Time would damage the journalistic integrity and independence of Time's publications.

It said Time had created some problems of integrity by launching its bid for Warner and failing to disclose more about the past legal problems of several present and former Warner executives.

Time and Warner called Paramount’s filing an “act of desperation.” In consolidated trading on the New York Stock Exchange, Time fell SUSI.B7i/ 2 a share to Warner rose 6214 US cents a share to SUSS9.I2>/ 2 dollars, and Paramount lost 75 US cents a share to $U558.50.

Time had agreed in March to merge with Warner in a stock swap, but amended that plan last week to provide for a SUS7O-a-share tender offer for Warner.

In announcing the new deal. Time rejected Paramount’s SUSI7S-a-share offer for all of Time’s shares and filed suit in the U.S. District Court in New York to block Paramount from proceeding

In response, Paramount claimed Time had made “misleading statements and material omissions designed to deceive Time stockholders” in its offer for Warner.

It said that by agreeing to the deal with Warner, Time “is forcing upon its shareholders a transaction whereby Time’s ‘integrity’ and financial future will fall under the control' of Warner, whose executives in the recent past have been the subject of criminal investigation, prosecution and in some cases conviction.”