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Time Warner, Turner deal expected next week


NEW YORK -- Turner Broadcasting System Inc. and Time Warner Inc.'s boards are expected to meet early next week to seal Time Warner's planned $8 billion acquisition of Turner, according to two executives involved in the negotiations.

Turner, Time Warner and Tele-Communications Inc. -- which controls 21 percent of Turner stock and has de facto veto power over the buyout -- are slated to continue talks this weekend, the executives said.

The boards are likely to convene in New York Tuesday or Wednesday to agree on the terms of forming the world's largest media and entertainment company, the executives said.

"It looks like the transaction will sail through, because it's in everybody's best interests," said Lawrence Haverty, a senior vice president of State Street Research in Boston, which holds 3 million shares of Time Warner and more than 550,000 Turner shares.

"It appears everybody is getting what they want."

While several issues remain under negotiation, major sticking points have been resolved, according to the executives.

Time Warner, which owns 18 percent of Turner's stock, has offered about $8 billion in stock, or $35 a share, for the remaining stock in Atlanta-based Turner Broadcasting.

Turner Broadcasting's shareholders are slated to receive three-quarters of a share of Time Warner for each Turner share, the executives said.

Turner Broadcasting is headed by billionaire Ted Turner, who founded the media and cable television empire 25 years ago.

TCI, the nation's largest cable TV system operator, through its affiliate Liberty Media would receive a sweeter ratio of eight-tenths of a share of Time Warner for its Turner shares, but Liberty won't get a special 5 percent dividend that it had been seeking, according to the executives.

Time Warner continues to haggle with TCI Chief John Malone, who wants Time Warner to remove its "poison pill" anti-takeover provision that would trigger the issuance of millions of new shares if a shareholder accumulates 15 percent of its stock.

Mr. Malone wants the right to accumulate in the combined

company an 18 percent stake -- the 10 percent stake that Turner will receive should the merger go through and should Turner decide to sell his shares, plus the 8 percent stake Malone will get.

Time Warner continues to remain adamant about not lifting the poison pill, and analysts and investors expect TCI and Mr. Malone to back off this demand.

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