Turner Delays Board Meeting as Time Merger Talks Continue

Turner Broadcasting System Inc. has postponed its regularly scheduled board meeting Friday because a merger agreement with Time Warner Inc. has not yet been completed, according to sources close to the talks.

Negotiations continued Wednesday and could be finished by the middle of next week if the three large shareholders of Turner Broadcasting can resolve their differences, sources said.

After slowing to a crawl late last week, the negotiations picked up momentum again over the weekend when Gerald Levin, chairman of Time Warner, flew to Denver to meet with John Malone, chief executive of Tele-Communications Inc., whose long list of demands to convert his major share holdings in Turner Broadcasting had stalemated the deal.

Levin flew to Turner Broadcasting headquarters in Atlanta on Tuesday to meet with Chairman Ted Turner and several other top executives. He returned to New York and met with Malone at Time Warner’s offices in Midtown Manhattan on Wednesday, according to people close to the talks, who said progress was being made and all three executives were committed to getting the deal done.

“Levin’s reputation is riding on pulling this off,” said one source.

Though investors had grown skeptical of the proposed $8-billion merger late last week, stocks of both companies traded up Wednesday. Time Warner shares closed at $40.50, up 25 cents. Turner A shares rose 75 cents to $29.75.

Sources close to Turner said he has privately said he would sell out to General Electric, the owner of the NBC television network, should the Time Warner negotiations break down. But those sources regarded Turner’s threat as a ploy to move Malone forward.

Malone would have much less bargaining power in a GE sale. Under complex shareholder rules, Time Warner and Tele-Communications have the right to veto any Turner transaction of more than $2 million, but neither company can block a sale by Ted Turner to an outside party like GE. Their only recourse would be to match the offer with cash.

Malone, reluctant to give up his 21% control in Turner for a much smaller stake in Time Warner, has made several stiff demands. Chief among them is a waiver of a Time Warner poison pill that prevents shareholders from accumulating more than a 15% stake, and the right to buy Ted Turner’s 10% equity stake in Time Warner.

GE is thought to be considering a deal with Time Warner after the merger as a way to gain access to the company’s programming assets so it can compete with Capital Cities/ABC Inc., which is being acquired by Walt Disney Co.