Paramount Says Antitrust Hurdles Have Been Cleared

Paramount Communications, which launched a hostile $10.7-billion offer for Time Inc. two weeks ago, cleared certain federal antitrust agency hurdles Wedneday but conceded in court documents that it is not prepared to purchase shares by July 5, the date its tender offer for Time is due to expire.

Lawyers for Paramount told a Connecticut judge that Paramount awaits an initial decision by the Delaware court where the company has sued to overturn some of Time’s anti-takeover defenses, including Time’s recent move to acquire Warner Communications for $14 billion. The next hearing in the Delaware case is set for July 11.

Paramount’s disclosure was made in response to a Connecticut lawsuit filed last week by American Television & Communications Corp., a cable TV company 82% owned by Time. The cable firm’s suit alleges that it would be forced to breach some of its financial agreements and franchises with local governments if Paramount is allowed to proceed with its tender offer without first obtaining the requisite license transfers.

Confirmed by Paramount

The Paramount admission in court was called to the attention of reporters by ATC but subsequently confirmed by Paramount. “We intend to extend our expiration date until after the (Delaware) court hearing and a decision,” said Jerry Sherman, Paramount’s vice president of corporate communications.

Sherman added: “Despite the efforts of Time to stir up opposition with misinformation, we expect to get cable franchise approval where required by state and local law in an orderly and expeditious way.”

Separately, Paramount said the Federal Trade Commission and the Justice Department’s antitrust division notified the company that a 15-day review period has ended without the agencies challenging the takeover on antitrust grounds.

Meanwhile, the price of Time shares rebounded slightly after a three-day decline. Time shares gained $4.75 to close at $157.25, while Warner dropped $1 to close at $58.50.

“People are coming to realize that the game is not over yet,” said an analyst, suggesting that another offer for Time may emerge.

Separately, Paramount is believed to have asked the New York Stock Exchange to determine if a Time acquisition of Warner would require a shareholder vote.

An exchange official, without commenting on the Paramount request, said, “As a standard procedure, we will review any deal of this nature that involves one of our listed companies.”