Time Warner Alters Plan for Stock Offering : Entertainment: Each share will carry a fixed price of $80. Shareholders and reportedly the SEC had objected to an original proposal to offer the stock without a preset price.

Embattled Time Warner Inc., under pressure from stockholders and the Securities and Exchange Commission, on Sunday abandoned a complex financing plan in favor of a more conventional offering that will raise about $2.8 billion for the debt-burdened company.

Time Warner will sell 34.5 million shares of common stock at a fixed price of $80 a share under the revised offering, which will be underwritten by three of Wall Street’s top brokerage firms.

Holders of the company’s 57.8 million outstanding shares of common stock will be eligible to purchase one-sixth of a share for each share they own. Time Warner will use the funds to pay down its nearly $11 billion in debt.

The announcement of the fixed-rate offering had been anticipated for several days.

Time Warner executives had promoted the initial proposal as the best way to strengthen the company’s balance sheet and attract foreign equity investors. But the variable-rate deal was lambasted by many shareholders and reportedly encountered SEC objections.

Under that plan, announced June 6, the share price was to be determined by the number of subscribers. The cost of the new stock would have been $63 a share if a minimum of 60% of Time Warner stockholders exercised their rights but would have climbed to $105 per share if 100% of the shareholders subscribed.

Opponents railed against a provision that required common stockholders to commit to a plan with an unknown price, calling it coercive. The deal was also criticized as being overly generous to company executives and investment bankers. As the backlash intensified, Time Warner shares plunged from about $117 before the variable rate plan was unveiled to $89.75 at the close of trading Friday.

Analysts predicted Sunday that the stock would regain ground, possibly reaching $95 a share, on news of the new equity-raising plan. If Time Warner succeeds in forging strategic partnerships in coming months, the price could top the $117 pre-rights-offering range, they said.

The New York-based communications giant--whose holdings include Warner Bros. studios and Time magazine--has been frustrated in its efforts to attract foreign investors because of its enormous debt, mostly taken on in the merger last year of Time Inc. and Warner Communications Inc. The company must pay off a large chunk of the debt--$4.3 billion--next year.

Time Warner, in a prepared statement, said the new offering was prompted by “extensive discussions” with shareholders and the SEC. The company refused to respond to widespread speculation that federal regulators forced it to abandon the original offering.

Investors who had publicly challenged the plan could not be reached for comment Sunday. But Lisbeth R. Barron, an entertainment analyst with S. G. Warburg & Co., said Time Warner may have “misjudged” the SEC’s response to the variable-rate plan, which was expected to bring in about $3 billion at an 85% subscription rate.

The three lead underwriters--Salomon Bros., Goldman Sachs and Merrill Lynch--are guaranteed fees totaling $82.8 million. In addition, they will receive a 3% discount on all shares of common stock they purchase, either through rights they hold or by buying shares not subscribed. The original deal included fees as high as $179 million for Time Warner’s investment bankers.

Goldman Sachs had declined to participate in the original rights offering.

Time Warner’s top executives also agreed to waive any adjustment in the price of their stock options that will result from the offering. Under the old offering, top-level management had the option of protecting itself from the dilution that would result from additional shares being issued.

Time Warner Chairman Steven J. Ross, his co-chief executive, N. J. Nicholas Jr., and Chief Operating Officer Gerald M. Levin said they will exercise all rights for the more than 250,000 shares they own in total.

Trading on the rights offering will begin today, on a when-issued basis and subject to SEC approval, Time Warner said. Stockholders as of July 22 will be entitled to the new rights. The offering will remain open through Aug. 5.

Time Warner’s New Deal

Media giant Time Warner on Sunday abandoned a securities offering that some analysts had criticized as both a raw deal for stockholders and a sweet arrangement for top executives and their investment bankers.

Here are some key points of that plan and the more conventional deal that will take its place:

The Original Offering

Price-per-share: $63 to $105, depending on the level of stockholder participation

Cash generated for Time Warner: $2 billion to $3.5 billion

Fees paid investment bankers: up to $179 million

The Substitute Offering

Price-per-share: $80

Cash generated for Time Warner: $2.8 billion

Fees paid investment bankers: minimum of $88.2 million