Time Warner adopts provision that makes hostile takeover tougher

Time Warner has changed its bylaws to make a takeover more difficult. Above, Time Warner CEO Jeff Bewkes.
(Associated Press)

In a move designed to ward off a potential hostile takeover, Time Warner Inc. approved a provision that would make it difficult for dissident shareholders to force a vote on a sale or attempt a change in the board of directors.

The change in the company bylaws, approved unanimously and disclosed in a Securities and Exchange Commission filing, eliminates the ability of shareholders to convene a special shareholder meeting. The next annual meeting of Time Warner shareholders will be in a year.

The move, which is a common ploy for a company resisting a suitor, comes in the wake of 21st Century Fox’s $80-billion offer for Time Warner. Although Time Warner’s board of directors rejected the offer, another bid is expected by insiders at both companies and Wall Street analysts.

Previously, only 15% of the company’s shareholders were needed to call for a special meeting. Now, special meetings can only be called by the chairman and chief executive or a majority of non-employee directors.


Time Warner has made clear that it does not want to sell to media mogul Rupert Murdoch, believing it has a better strategy for its assets, which include Warner Bros. and cable channels HBO, TNT and TBS.

Besides buying Time Warner Chief Executive Jeff Bewkes time to prove that his vision for the company is the right one, the provision could also give time for a rival buyer more to Time Warner’s liking to emerge. It will also give shareholders more time to evaluate 21st Century Fox’s offer and its strategy.

Follow Joe Flint on Twitter @JBFlint.