Talk of Interest by Bass Boosts Time’s Stock
The price of Time Inc. shares surged $7.75 in active trading Tuesday, following a published report that the Robert M. Bass Group has accumulated a 2% stake and is considering making an offer for the publishing giant.
Late Tuesday, however, a Time official said that Bass is not expected to mount a hostile bid. “That’s our very strong view,” the executive said. “Whether they have a stock position or not, the final (point is) . . . there is nothing going on.” He would not elaborate and spoke on condition of anonymity.
A Bass spokesman would not comment on the story, which appeared in Tuesday’s editions of the Wall Street Journal. The Bass group has been buying shares since Time early this month announced plans to merge with Warner Communications, the Journal said. The article said this reflected “an apparent belief by Bass that the proposed Time-Warner merger is a bad deal for Time’s shareholders.”
The Time-Warner agreement has been widely viewed as a coup for Warner Chairman Steven J. Ross because Warner shareholders will end up owning about 60% of the combined company. Since the proposal calls for an exchange of stock, some investors have speculated that new bidders--with cash--might fight for control of either Time or Warner.
Time and Warner have already taken one step to discourage an unfriendly bid, however. On the authority of each company’s board of directors, Warner has sold 10% of its stock to Time and Time has sold a 12.5% stake to Warner.
The full merger cannot be consummated until federal regulators review the plan for antitrust implications and it is put to a shareholders’ vote--perhaps not before summer.
Any overt show of interest on the part of the Robert M. Bass group seemed certain to spur speculative trading. Bass, 41, is the third of four Bass brothers who inherited much of the Texas oil fortune amassed by Sid Richardson, their great-uncle. As recently as 1984, Robert Bass operated in the shadow of his eldest brother, Sid, in investments such as Walt Disney Co., but Robert has since pursued media investments on his own. An investment in Taft Broadcasting, for example, resulted in a $1.45-billion restructuring of the Cincinnati broadcasting and entertainment concern.
The Robert Bass group last year touched off a four-months-long bidding war for Macmillan Inc., but withdrew a $2-billion offer after Maxwell Communication Corp. made a significantly higher bid for the New York information services company. More recently, Bass acquired 40% of the voting stock of the closely held Times Publishing Co., which owns the St. Petersburg (Fla.) Times and Congressional Quarterly.
On the New York Stock Exchange, the price of Time Inc. shares made the seventh greatest gain by percentage, closing at $119 a share.
