Levin in Atlanta Fine-Tuning TBS Deal : Media: Time Warner chief plans to present proposal Friday.

Time Warner Inc. Chairman Gerald Levin is meeting with Turner Broadcasting System Inc.’s chief Ted Turner to hash out a final acquisition proposal to present to Turner’s board Friday, according to two executives close to the negotiations.

Levin, who last month proposed to buy Turner in a deal worth $8 billion or more, flew to Atlanta on Tuesday to continue negotiations that would create the world’s largest media and entertainment company.

Turner, who heads the media and cable television empire he founded 25 years ago, flew to the company’s Atlanta headquarters a day early, leaving his 131,000-acre ranch near Bozeman, Mont., to complete details of the transaction, the executives said.

Turner’s board is scheduled to meet Friday in Atlanta.

The talks follow two weeks of languishing negotiations, which were snagged by Tele-Communications Inc. escalating its demands in turn for its approval of the transaction. TCI, the nation’s largest cable system operator, controls 21% of Turner stock through an affiliate and has de facto veto power over transactions of $2 million or more.

TCI Chief John Malone threatened to foil the acquisition by demanding the right to accumulate in the combined company an 18% stake--the 10% stake that Turner will receive should the acquisition go through and should Turner decide to sell his shares, plus the 8% stake Malone will get.

While Malone hasn’t completely revoked his request to get a waiver from Time Warner’s “poison pill,” according to the executives, many investors believe Malone will back off and the Time Warner-Turner merger will proceed.

“Malone’s [poison pill] demand appears a clever bargaining chip,” said David Shell, a senior vice president with Liberty Investment Management in Tampa, Fla., which owns more than 800,000 shares of Turner and 2.5 million shares of Time Warner. “This merger makes a lot of strategic sense, and I believe John Malone recognizes that.”

Turner stock rose Tuesday, reflecting increased optimism the company will sell out to Time Warner, analysts and traders said. Turner’s Class B stock closed up $1.25 to $29.50 on the New York Stock Exchange. New York-based Time Warner closed up 12.5 cents at $40.25 on the NYSE and TCI rose 25 cents to close at $19 on the Nasdaq.