Dow Jones and Group W Drop Bid for FNN

NEW YORK — Dow Jones & Co. and Group W Broadcasting Co. said Friday that they have abandoned their three-month fight to jointly acquire Financial News Network.

The companies said they ordered their lawyers to drop all legal challenges to the acquisition of FNN by Consumer News and Business Channel, a unit of NBC.

After weighing the competing bids, a federal bankruptcy judge on May 9 declared CNBC the winner. But Dow Jones, Group W and the attorneys general of Pennsylvania and Illinois challenged the decision, contending that the merger of the two competing financial news cable-TV networks would violate antitrust laws.

The attorneys general said Friday that they too are dropping their antitrust challenge. A spokesman for the Illinois official said CNBC had agreed to maintain through 1994 the same rate structure with the state’s cable operators that FNN had.

The end of the legal challenges apparently clears the way for CNBC’s acquisition of FNN for $145 million plus assumption of $9.3 million in debt and an additional payment if CNBC’s and FNN’s combined revenue exceeds $227 million over the next three years. The structure of the Dow Jones/Group W final offer was similar, but the cash portion amounted to only $125 million.

In a statement, NBC said it was “delighted” with the Dow Jones/Group W decision, although it asserted that it would have won the legal fight. NBC said: “Now that the states are withdrawing, the battle for FNN is over and the path to closing this transaction is fully cleared.” Spokesman Joe Rutledge said NBC expects the acquisition to close “some time over the next week.” He said FNN and CNBC would combine their operations within a day of the closing.

In a statement, Donald Mitzner, president of Group W Satellite Communications, said: “It’s quite clear that, while we believe there were significant legal issues, continued pursuit of FNN would involve lengthy litigation that would further degrade the FNN property and cause confusion among FNN’s remaining employees, the cable industry and its customers. We thought it best, therefore, to withdraw at this time.”

Senior Vice President Peter G. Skinner said Dow Jones is disappointed that its partnership with Group W, a unit of Westinghouse Electric, lost out. But both companies said they wish CNBC well.