Time Warner Completes Deal With Japanese

Time Warner Inc., the entertainment and media giant, announced on Tuesday the finalization of its long-planned, $1-billion partnership with Japan’s Toshiba Corp. and C. Itoh & Co.

The Japanese firms will receive a 12.5% stake in a subsidiary venture, Time Warner Entertainment Co. The commitment to form the partnership was announced last October.

The subsidiary, which is 87.5% owned by Time Warner Inc., encompasses the Warner Bros. studio in Burbank, along with Home Box Office and other cable operations. Time Warner’s magazine, book publishing and music operations are excluded from the deal.

As part of the investment, New York-based Time Warner and the Japanese companies have formed a venture in Japan named Time Warner Entertainment Japan. It will be 50% owned by Time Warner Inc., with Toshiba and C. Itoh owning 25% each.

Time Warner Inc. sought the Japanese investment to pay down some of the mammoth debt incurred from the 1990 merger of Time Inc. with Warner Communications Inc. Time Warner stock rose $1.625 to $111 in New York Stock Exchange trading, just below its 1992 high of $112.375.

Lisbeth R. Barron, a securities analyst in Manhattan, predicted that, because of the $1-billion partnership and a related refinancing of Time Warner’s outstanding bank debt, the company will be able to climb “much closer to profitability” next year.

Edward Adler, a spokesman for Time Warner, confirmed that although the refinancing will raise slightly the interest associated with the bank debt, it also will extend by three years--till 1997--the deadline for repayment.

Toshiba Corp. is a global leader in computers and consumer electronics. C. Itoh & Co. is the world’s largest trading group.