Turner Makes $3-Billion, No-Cash Offer to Buy CBS : Wall Street Scoffs at Provisions

NEW YORK — Maverick cable television magnate Ted Turner, saying he always wanted to own his own network, today launched a hostile bid totaling nearly $3 billion to take over CBS. Wall Street scoffed at his offer, which includes no cash.

Turner, in a filing with the Securities and Exchange Commission, said he is offering CBS’s 20,000 shareholders a complicated package of stocks, bonds and other fixed-income securities for a 67% stake in the CBS broadcasting empire.

The Turner Broadcasting System wants to acquire 21 million shares of CBS common stock at a price of what analysts said amounts to about $150 per share.

Should the stockholders accept Turner’s offer, they would get no cash for their stock.

‘Acting Alone,’ He Insists

Turner, known by critics as “the mouth of the South,” said that if his bid is successful, he will merge CBS into Turner Broadcasting Systems, his Atlanta-based cable television operation.

“I want to make it clear that Turner Broadcasting is acting alone,” he said about reports that he is working with conservative groups, especially Fairness in Media and Sen. Jesse Helms (R-N.C.). “There is no connection to any ideological group.”

CBS has vowed to vigorously fight the takeover and today released a statement saying: “The unusual number and complexity of Turner’s proposed securities make it difficult for CBS to comment at this time. Once we have evaluated the materials, CBS will inform its shareholders of the merits of Turner’s proposal.”

Analysts doubted that the flamboyant sportsman and entrepreneur will be able to pull off his long-shot bid for CBS, a bid that has been rumored for several months.

Analysts Unimpressed

CBS stock closed down 3 1/2 points at $106.25 a share today. It was the fifth most actively traded issue. The stock had been rising for days in anticipation of a takeover bid.

Wall Street analysts said they are not impressed with Turner’s plan because he is not making a cash offer and because he said he plans to sell off all non-broadcasting CBS businesses and its highly profitable radio stations as well.

But Turner defended his move in a meeting with Wall Street analysts, which saw tempers flare when many of them were refused entry.

The invited analysts--who would have the power to recommend acceptance or rejection of a Turner deal to their clients--were reluctant to evaluate the Turner bid after the meeting.

Rejected Several Times

Turner, in a brief statement to reporters after the session, said he had approached CBS several times in the last four years about merging with Turner Broadcasting Systems and had been rejected.

“Thus, we have decided to let CBS shareholders decide for themselves whether they want Turner Broadcasting to acquire their company,” Turner said.

The cable entrepreneur said his proposal to seize control of CBS involves buying a 67% of CBS’s outstanding stocks, followed by a merger of the two companies.

Roughly 50% Ownership

He said his exchange offer, if successful, will give TBS roughly a 50% ownership in the combined company.

“We do not intend to make any fundamental changes in CBS broadcasting,” Turner emphasized. He did concede that he would make efforts to improve the quality and objectivity of the network’s programming.

Turner said CBS shareholders taking advantage of his bid would receive in excess of $21 more in value for each share they own today.