GE Unit Wins FNN With a Bid of $145 Million : Broadcasting: But another bidder in the heated auction, a partnership of Dow Jones and Group W, will try to reverse the bankruptcy court award.

After sweetening its bid one last time, General Electric Co.’s CNBC unit Thursday won the heated auction to acquire Financial News Network, but a rival group vowed to press its attempt to buy the ailing cable business channel.

Consumer News and Business Channel’s winning bid, selected by U.S. Bankruptcy

Judge Francis G. Conrad, was $145 million in cash. In addition, CNBC agreed to assume $9.3 million worth of FNN liabilities and to make a contingent payment if CNBC and FNN’s combined revenue exceeds $227 million over the next three years.

CNBC President Albert F. Barber said CNBC and FNN will be combined as soon as the deal closes. “We will have the best of the two services,” he said. “The concept of shutting down FNN is not appropriate.”

But the losing bidder, a partnership of Dow Jones & Co. and Westinghouse Electric’s Group W Broadcasting Co., continued to insist that CNBC’s takeover of FNN would give the combined entity an illegal monopoly in the market for continuous cable business news.

Earlier this week, Dow Jones/Group W and several state attorneys general filed separate antitrust suits attempting to block CNBC’s takeover of FNN. A hearing in one of the suits is scheduled for this morning.

Last month, a deadlocked U.S. Federal Trade Commission refused to block CNBC’s takeover of FNN. Commission members voted 2 to 2, with one abstaining.

“The question the courts will have to grapple with is: How do you define the market?” asked Lewis A. Kornhauser, professor of law at New York University. “Does the market consist of only these two channels, or can it be more broadly defined to include Cable News Network, on-line computer services, radio, broadcast television and even newspapers and magazines?

“The courts will have to examine the type of information (the networks) provide and what the alternate sources of information might be,” Kornhauser said.

In addition to the antitrust challenge, Dow Jones and Group W plan to appeal the ruling in favor of CNBC on procedural grounds. In particular, they plan to challenge the judge’s decision to reopen the bidding during conference telephone calls Wednesday evening and Thursday morning.

“It was our position that the bidding was closed and over,” said Dow Jones Senior Vice President Peter G. Skinner. “We were offered the opportunity to change our bid, and we declined.”

The Dow Jones group’s bid was $125 million in cash and, like CNBC’s offer, $9.3 million in assumed liabilities. The Dow bid also included a complicated provision for a contingent payment based on future revenues.

Initially, the Dow group guaranteed only $10 million of this contingent payment--but later offered to guarantee another $17 million.

CNBC, countering the Dow group’s bid Thursday morning, raised its $140-million cash bid to $145 million and for the first time adopted the Dow group’s revenue-sharing scheme. The contingent payment will consist of half the combined FNN/CNBC revenue above $227 million, if any, between 1992 and 1994.

“The CNBC bid accepted by the court is clearly superior to the last Dow Jones/Group W bid,” said Allan R. Tessler and Alan J. Hirschfield, co-chief executives of FNN. “We are grateful that the estate has gained substantially more than the amounts contained in the original bids.”

The Dow group initially bid $90 million in February but was topped by CNBC’s $105 million a month later.

One attorney estimated that CNBC’s bid would result in creditors receiving more than 85 or 90 cents on the dollar, with perhaps some money going to FNN shareholders.

Both bidders have much at stake. For Dow Jones, whose flagship Wall Street Journal has been losing circulation and advertising since the stock market crash of 1987, the acquisition of FNN would provide an entree to the potentially lucrative cable TV market.

GE’s acquisition of FNN would help it salvage its investment in CNBC, which has lagged far behind FNN since CNBC began operating two years ago.

CNBC GETS FNN NBC’s Consumer News and Business Channel won the bidding for certain assets of Financial News Network Inc.: Financial News Network Inc. holdings: Financial News Network, business news cable network. FNN: Sports, sports information service on the FNN cable network. FNN Business Radio, business news feed for radio stations This Morning’s Business, syndicated TV show. Additional holdings, not involved in the CNBC deal: 51% stake in the Learning Channel, jointly owned with Infotechnology Inc. FNN and Infotechnology have agreed to sell their stake to The Discovery Channel. FNN-Data Broadcasting, stock quotes and market information service via personal computer. 49% stake in Shark Information Services Corp., stock quotes and market information for professional investors. Number of households reached, in millions: FNN: 35.8 CNBC: 18.6 Source: Company reports AP/Los Angeles Times

FNN Chronology Here are some key events in the recent history of Financial News Network Inc., which is selling all its assets under supervision of the U.S. Bankruptcy Court.

Oct. 13, 1990: FNN fires chief financial officer and ends association with its accounting firm by mutual agreement.

Oct. 24: Alan J. Hirschfield and Allan R. Tessler are named co-chief executives, replacing Earl Brian. The company says it is the subject of Securities and Exchange Commission investigation.

Nov. 7: Hirschfield and Tessler recommend selling FNN assets.

Nov. 29: FNN says new auditors have reviewed its books for the fiscal year ended June 30 and determined the company lost $72.5 million for the year.

Feb. 12, 1991: FNN announces agreement in principle to sell its business news cable-TV channel to a partnership of Dow Jones & Co. and Westinghouse Broadcasting Co. for about $90 million.

Feb. 14: FNN agrees to sell interest in the Learning Channel to the owners of another cable network, the Discovery Channel, for $31 million.

Feb. 26: FNN announces definitive agreement to sell business cable channel to NBC’s Consumer News and Business Channel, its main cable-TV rival, for $105 million.

March 1: FNN files for Chapter 11 bankruptcy protection, listing liabilities of $145.4 million and assets of $75.5 million.

March 20: The Dow-Westinghouse partnership offers $115 million for FNN.

April 3: The bankruptcy court disqualifies the Dow-Westinghouse bid because the partners failed to hold the offer open until May 31 as CNBC had. The court accepts the CNBC offer, which is then sweetened to $115 million.

April 9: Dow-Westinghouse group appeals the bankruptcy court decision.

April 17: A federal judge overturns the bankruptcy court’s acceptance of the CNBC offer and instructs the court to review both bids.

April 30: A federal appeals panel dismisses CNBC’s appeal of the federal court ruling that sent the FNN case back to bankruptcy court.

May 7: The bankruptcy court conducts an auction. The Dow-Westinghouse partnership offers $167.1 million, including $125 million in cash and another $32.8 million over three years if certain revenue projections are met. CNBC offers $149.3 million, including $140 million in cash.

May 9: The judge selects the CNBC bid, raised to $145 million. The Dow-Westinghouse group vows to appeal.

WAVE OF MERGERS

Why several rival cable TV channels have been forced to merge. A1