Disney Said to End NBC Bid, Not Content With 49% Stake : Acquisition: The withdrawal may aid the position of Time Warner, which seeks a minor stake to avoid regulatory problems.

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The Walt Disney Co. has ended negotiations to buy General Electric’s NBC after only being offered a deal to acquire 49% of the network, one knowledgeable source said Friday.

Industry sources said Disney did not want to pay a premium to buy a minority stake in NBC but still remains interested in acquiring a network. GE values NBC at $5.5 billion, the sources indicated.

Disney’s decision to pass on the NBC deal at this time may enhance the negotiating position for Time Warner, which does want the 49% deal to avoid regulatory problems. Ted Turner’s Turner Broadcasting System is also pursuing talks with NBC.


The Hollywood studios--which face a shrinking market for the TV programs they supply--see the broadcast network as a secure distribution outlet for their shows. Time Warner owns Warner Bros., and Turner owns two independent production companies as well as CNN.

Spokesmen for Disney and GE could not be reached for comment.

GE Chairman John Welch has been firm about selling only a minority stake in NBC, which encompasses a television network and seven TV stations in addition to cable network CNBC.

“What you’re dealing with right now in all these discussions are things that really look to the future,” said one senior network executive. “Welch still believes in this business, and he wants a strategic alliance where two-plus-two equals nine.”

A source close to Welch, however, said that although the hard-driving GE chairman would prefer a strategic alliance, he could change his mind in the future.

“Until he’s convinced he can’t do his (49%) deal, that’s all he’s going to entertain,” said the source, who also pointed out there is nothing to prohibit GE from putting the entire network on the market down the road.

Time Warner has been holding discussions with GE about acquiring a 49% stake in the NBC Television Network while allowing GE to retain full control of the seven NBC TV stations it owns in major markets such as New York, Los Angeles and Chicago.


But Time Warner faces rival interest from cable mogul Ted Turner, who has wanted to acquire a broadcast network ever since his failed 1985 hostile bid for CBS. Earlier this week John Malone, the chief executive of Denver cable TV giant Tele-Communications Inc., met with Welch on behalf of Turner to press the cable mogul’s case. TCI is a major TBS shareholder.

Turner, however, is in a difficult position because Time Warner is also a major TBS shareholder. Time Warner might be willing to get out of Turner’s way--in the past it has blocked efforts by Turner to cut deals--if it could swap its equity stake in TBS for one of the company’s entertainment cable TV networks like TBS, TNT or The Cartoon Network.

Disney shares fell 75 cents to $39.50 on Friday, a new 1994 low. Time Warner lost 62.5 cents to $36.50 and Turner A shares were unchanged at $18.375. GE stock was off 37.5 cents to $48.75.