Time Warner Makes Offer for Turner Broadcasting : Mergers: Bid reportedly involves $8.5-billion stock swap. Latest mega-deal could create largest of media giants.

In a move that would create the world’s largest media company, Time Warner Inc. has offered to buy Turner Broadcasting System, sources close to the talks said late Tuesday.

Turner Broadcasting, the Atlanta-based cable conglomerate created by media mogul Ted Turner, operates Cable News Network, Headline News and TBS SuperStation. It had not accepted the offer Tuesday, but company executives were in New York and were scheduled to meet with Time Warner.

CNN reported that a board meeting would be held today to consider the bid, though the station did not say whether the meeting would involve Turner’s board, Time Warner’s board, or both.

“There is an effort to put the two companies together,” one source said.

The New York Times reported that the offer, apparently a stock swap, is worth $8.5 billion. But the source said: “I’m not sure the numbers work that way.” Neither company confirmed the value of the offer.

Executives from both companies were unavailable for comment Tuesday night.

If the merger is approved, the Time Warner-Turner conglomerate would have revenue in excess of $18.7 billion, the newspaper reported. That would surpass the alliance of Walt Disney Co. and Capital Cities/ABC Inc., announced earlier this summer, and far exceed the recently announced Westinghouse Electric Corp. bid for CBS Inc.

Under terms of the proposed deal, Time Warner would purchase the 81% of Turner it does not already own by issuing 126 million new shares, the newspaper said.

Turner shareholders would receive seven-tenths to eight-tenths of one share in Time Warner in return for each Turner share. That would value Turner stock at $35 a share. It closed Tuesday at $24 a share hours before word of the deal leaked out.

If TBS does agree to the merger, it reportedly would become a subsidiary of Time Warner, with Ted Turner becoming vice chairman of Time Warner and Turner Broadcasting receiving two seats on Time Warner’s board.

Time Warner is led by Gerald Levin, who would head the combined company, according to the New York Post.

One potential obstacle in the merger could be Tele-Communications Inc., the largest cable system operator in the United States. The cable giant owns more than 20% of Turner shares, giving it power to veto the deal.

John Malone, TCI president and chief executive officer, reportedly met with Levin on Tuesday to discuss the deal, but it was not known how he reacted.

The combined company would be a major player in both the cable television and entertainment industries.

Time Warner’s presence in the cable business is highlighted by its Home Box Office and Cinemax premium channels, as well as its Time Warner Cable operation, which ranks second in the United States.

In entertainment, such a merger would immediately thrust the new company into a leading role in Hollywood, with Warner Bros., New Line Cinema and Castle Rock Entertainment under one name.

Turner also owns a majority stake in the Atlanta Hawks basketball team and the Atlanta Braves baseball team.

Time Warner operates a publishing division that includes Sports Illustrated, Time and People magazines, as well as the Book-of-the-Month Club and Warner Books.