Time, Warner Merger Hailed by Wall Street

Wall Street today applauded Warner Communications Inc.’s $18-billion merger agreement with Time Inc. to create the world’s largest media company, but the magazine firm’s stock fell as long-present takeover speculation subsided.

In heavy trading on the New York Stock Exchange, Time fell $1.75 to $107.375 while Warner jumped $3.125 to $49 as traders got their first chance to react to the weekend announcement.

Time shares had recently moved higher in anticipation that the company might receive a takeover bid for a minimum of $120 a share. But the merger with Warner reduces the likelihood that it will be acquired, causing its stock to fall.

Time and Warner officials, meeting with securities analysts today, reaffirmed their commitment to the stock-swap merger and said they will not consider any cash offers for either company.

‘We Are Not for Sale’

“A cash deal would not work here,” Warner Chairman Steven J. Ross told analysts. “We are not for sale and never have been.”

Time President Nicholas J. Nicholas Jr. also said the ratio of the stock-swap will not be modified. “This deal will close as specified,” he said.

They touted the proposed transaction as a “true” merger of equals. But Time appears to come out of the deal holding a few more of the cards. Its president, Nicholas, will become chief executive of the combined companies in five years.