Time creates media giant

Press, 26 July 1989, Page 32

Time creates media giant

NZPA-Reuter New York Time Inc has eluded an unwanted suitor and bought Warner Communications in a SUSI 4 billion ($NZ24.58) deal which creates the world’s largest media company.

Time said it acquired 58 per cent of the Warner stock on Monday hours after the Delaware Supreme Court denied an appeal by Paramount Communications, which sought to block the Time-Warner deal.

Within hours of the court ruling, Paramount dropped its $U512.28 bid for Time.

Time now must forge a company out of the vast holdings of Warner and Time while borrowing more than SUSBB to complete the deal. Time chairman, Mr Richard Munro, who will co-chair the newly formed Time Warner Inc, said the board will meet to consider how Time would acquire the remaining Warner shares. “We will begin discussing that (the purchase of remaining shares) in some detail,” Mr Munro said, adding that the process should be completed within 60 to 90 days. Time has said it will buy the shares

through a combination of cash, equity or debt securities valued at SUS7O a share. In the ruling on Monday, the Delaware Supreme Court upheld a lower court decision allowing the buy-out of Warner to go through even though Time did not put the plan to a stockholder vote. Opposing lawyers called the Time victory a major blow to shareholder rights. Paramount’s legal challenge was part of its effort to win Time in a takeover bid that was considered dead if Time and Warner merged. The Time-Warner merger sets up a company with combined sales of SUSB.7B, by far the largest media company in the world, passing Bertelsmann A.G., the West German conglomerate that owns Doubleday Books and RCA Records and has sales of SUS6.2B, and Rupert Murdoch’s News Ltd with $4.358 in sales.

With Time, Money, Sports Illustrated, People and other publications, Time is already the nation’s largest magazine publisher. Lesser-known properties such as Time’s vast cable television holdings and its Home Box Office and Cinemax make even more money for the media giant than the well-known magazines.