Stockholders representing nearly 79% of the outstanding Time Warner shares approved the merger agreement, according to a preliminary count of votes during a special shareholder meeting in Atlanta.
The blockbuster stock and cash deal would transform Dallas-based AT&T into a phone and television behemoth with such prominent media assets as
The AT&T-Time Warner deal — which must win the blessing of the
Time Warner Inc. was stitched together from the Time Inc. magazine empire,
But in the last decade, under Chairman and Chief Executive Jeff Bewkes, Time steadily shed slower-growing assets, including magazines, the former Time Warner Cable pay-TV service and AOL, which tarnished the company's reputation as the biggest failed media merger in history. By slimming down the company, Bewkes made it more attractive to a takeover.
Time Warner fought off the advances of
"We think this transaction makes sense strategically and financially," Bewkes told shareholders who traveled to the Omni Atlanta Hotel near CNN's Atlanta headquarters for the meeting. "The video marketplace is changing rapidly, and it is becoming clear that just producing great content is no longer enough. We need to deliver great consumer experiences."
AT&T and Time Warner are bracing for more turmoil in the media industry as consumers opt for smaller cable bundles and other video-on-demand platforms so they can avoid commercials. AT&T wants to own some of the most popular TV channels around as a way to hedge its bets and figure out ways to deliver advertising that is more relevant to consumers.
Rather than simply competing with mobile phone companies Verizon, Sprint and T-Mobile, AT&T sees as big a threat from Silicon Valley technology giants such as Google, which is the nation's largest ad seller, device maker Apple Inc. and Netflix.
Two shareholders spoke during Wednesday's meeting.
"Why did you plow ahead with the merger in October? What was the rush?" demanded Mindy Wasserman, a shareholder from Boston. Is talent "willing to work for a Warner Bros. that is owned by AT&T?"
When Bewkes said yes, Wasserman immediately challenged him, saying: "Even J.K. Rowling?"
The second shareholder, Alice La Brie, who previously worked at the Warner Bros. studio in Burbank, lavished praise on Bewkes and his management team. "That's very kind of you," Bewkes said. He said that he would stick around for at least a year after the deal closes to help lead the integration.
Shareholders also approved a compensation plan for ranking Time Warner executives. The heads of the company's three divisions are expected to remain.
Wall Street is betting that the deal is approved. Time Warner shares closed down 7 cents to $96.32. The shares are trading at their highest levels in five years.