Malone Demands Said to Be Slowing Turner-Time Talks

Negotiations that could lead to the merger of Turner Broadcasting System Inc. and Time Warner Inc. have slowed as the result of tough demands by John Malone, the big shareholder of Turner Broadcasting, according to sources close to Malone.

As a result, a merger is unlikely to be announced today and may not be unveiled until next week if the negotiations are fruitful, according to these sources. After a week of heavy negotiations and public attention, some Wall Street and industry sources have become skeptical about prospects for a deal.

Malone, the chief executive of Tele-Communications Inc., could veto the merger because he owns special Class C voting shares in Turner, although he could face a backlash from Turner shareholders if he opposes the approximately $8.5-billion merger, which values the company at a huge premium to the market, at about $35 a share.

“From Malone’s perspective, he’s saying: ‘I saved Ted Turner, I pulled together the financing to clean up his balance sheet, I saw the value in the company that others didn’t,’ ” one investment banker said.

In 1987, Malone organized a group of cable systems companies, including Time Warner, that rescued Ted Turner after his expensive purchase of the MGM film library.