MediaOne Gives Up Management Rights in Time Warner Partnership
Time Warner Inc., the world’s largest media company, said MediaOne Group Inc. gave up its management rights in their Time Warner Entertainment partnership because of its planned purchase by AT&T; Corp.
Time Warner said it received notice Aug. 3 that MediaOne was ending its agreement not to compete with Time Warner Entertainment, which controls most of Time Warner’s cable systems as well as HBO and Warner Bros. studio. That notice triggered the cancellation of MediaOne’s management rights.
MediaOne had to end the non-compete agreement as part of AT&T;’s planned $52.5-billion purchase of the Englewood, Colo.-based company, according to a Securities and Exchange Commission filing. The move will allow Time Warner to consolidate the partnership’s financial results with its own, beginning with the filing of its third-quarter report to the SEC.
MediaOne owns 25.5% of Time Warner Entertainment and has a 50% management interest in its cable operations. Time Warner sold the stake to MediaOne’s former parent, regional phone company US West Inc., for $2.5 billion in 1993.
On the New York Stock Exchange, Time Warner shares rose $1.13 to close at $62.75, while MediaOne shares rose $2.13 to $70.13.
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