NEW YORK (CNNfn) - Time Warner Inc. reportedly is close to an amended agreement to purchase Turner Broadcasting System Inc., following weeks of negotiations with Turner shareholder Tele-Communications Inc.
The Wall Street Journal reported Friday that Time Warner and cable giant TCI have hammered out amendments to the deal that were demanded by enforcers at the Federal Trade Commission. Time Warner's board on Thursday gave negotiators permission to reach a new agreement with TCI and Turner.
The newspaper said it learned of the status of the talks in a filing inadvertently disclosed in an electronic draft sent to the Securities and Exchange Commission. The filing said Time Warner plans to pay $95 million in "transaction costs and other related liabilities," mainly from legal and investment banking fees." Experts said that is an unusually large amount for such services.
Time Warner disputed the contents of the filing, saying they were "inaccurate and dated." However, sources close to the talks told the newspaper that the filing was correct.
Before giving final approval of the $6.5 billion merger, federal regulators required Time Warner to take steps that limited TCI's influence. TCI owns a 22 percent stake in Turner that will be converted to a 9 percent interest in Time Warner.
The newspaper said TCI Chairman John Malone, known as a tough negotiator, was open to changes in the initial deal. Malone agreed to cancel an arrangement that would have given TCI a 15 percent discount on Turner programming for 20 years. In exchange, Time Warner will pay TCI an extra $67 million to cover TCI's tax liability from the changes.
Turner operations include the Cable News Network, CNN Headline News, WTBS and CNNfn.