Time Warner Concession in Suit Over Turner Deal Is Hinted

Time Warner Inc. Chairman Gerald Levin said he’s willing to consider putting part of Turner Broadcasting System Inc. into Time Warner’s troubled partnership with US West Communications Inc.

The statement, made in court testimony Monday, was perhaps the most conciliatory gesture Time Warner has made toward US West since it was sued by the regional telephone company.

Levin’s testimony came in the fourth day of a Delaware Chancery Court trial in which US West is attempting to block Time Warner’s pending $7.5-billion acquisition of Turner Broadcasting, the Atlanta-based owner of Cable News Network and other cable television networks.

While Levin sounded flexible, US West appeared to dig in its heels. US West spokesman Steve Lang said earlier in the day that his company isn’t in talks to settle the legal dispute and doesn’t expect to negotiate soon.

Lang’s statement, made in an interview just before the start of testimony, is the first time either company has publicly denied settlement talks.

US West’s suit alleges that the Turner acquisition would violate the terms of its partnership with Time Warner, called Time Warner Entertainment. US West, which holds a 25% stake in the partnership, claims that Time Warner is legally obliged not to compete with the partnership. The partnership contains Warner Bros. films, Home Box Office and cable systems.

Levin stuck by his company’s position that the partnership agreement doesn’t obligate Time Warner to obtain US West’s permission to buy Turner Broadcasting.