Time Warner Companies Inc – ‘SC 13D/A’ on 9/25/95 re: Turner Broadcasting System Inc – EX-7

As of:  Monday, 9/25/95   ·   Accession #:  736157-95-41   ·   File #:  5-32143

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Amendment to General Statement of Beneficial Ownership   —   Schedule 13D
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D/A    Amendment to General Statement of Beneficial           9     36K 
                          Ownership                                              
 2: EX-7        Opinion re: Liquidation Preference                     4±    15K 

EX-7   —   Opinion re: Liquidation Preference

                                         Exhibit 7

For Immediate Release                                                           

TIME WARNER INC. AND TURNER BROADCASTING SYSTEM, INC.                           
AGREE TO MERGE, CREATING THE WORLD'S FOREMOST MEDIA COMPANY                     

-  Company Will Have Unmatched Combination of News, Entertainment       
and Information Resources and Distribution Systems                

-  R.E. Turner To Be Named Vice Chairman and To Join Time Warner        
Board                                                             

NEW YORK and ATLANTA, GA., Sept. 22, 1995-The boards of directors               
of Time Warner Inc. and Turner Broadcasting System, Inc. (TBS)                  
have approved plans to merge their respective companies, forming                
a global media organization with the world's foremost combination               
of news, entertainment, information resources and distribution                  
systems.  The announcement was made today by Time Warner Chairman               
and CEO Gerald M. Levin and TBS Chairman and President R.E.                     
Turner at a press conference in New York.                                       

"This is a remarkable fit with concrete opportunities for growth                
that start right from the beginning.  This growth potential will                
provide substantial opportunity for our shareholders, employees                 
and customers. We share a common vision of the future, and we                   
will pursue that future through a shared strategy; creating and                 
capitalizing on brands; pursuing international expansion; and                   
leveraging technological advances. The complementary nature of                  
the two organizations will allow us to maximize the value of our                
assets and distribution systems and position us as the leading                  
media company in an increasingly competitive global marketplace,                
" said Levin. "Ted is clearly one of the most brilliant                         
entrepreneurs of our time. I am pleased he has chosen Time Warner               
as the right home for his great enterprise.  We enthusiastically                
welcome Ted and his team to our family."                                        

"After carefully considering many options, it became clear that a               
strategic partnership with Jerry Levin and Time Warner was the                  
best way to ensure the continued growth and expansion of Turner                 
Broadcasting," said Turner. "Our new enterprise will have                       
unsurpassed capability to create and deliver the highest quality                
news, information and entertainment to every corner of the globe.               
We share a common vision for the future and working together we                 
will make that vision a reality."                                               

John Malone, president and CEO of TCI, said, "We've been partners               
with both TBS and Time Warner for years. We know both companies                 
very well and that's why we were so enthusiastic about playing a                
role to make this deal happen. I have the highest respect for                   
Jerry and Ted and the Levin/Turner team is a terrific                           
combination. The new constellation of assets create a world class               
company. While our position is passive, we look forward with high               
confidence about our continuing investment in this great                        
company."                                                                       

Ted Turner added, "John has been by my side as a friend, guide                  
and partner for many years. We once again appreciate his advice                 
and confidence."                                                                

The combined company showcases some of the world's best known                   
brands including Time, People and Sports Illustrated magazines,                 
CNN, Warner Bros., TNT and HBO as well as some of the most widely               
distributed global products including the music of Warner Music                 
Group distributed to hundreds of millions of people worldwide and               
CNN International seen by viewers in 210 countries and                          
territories. The merger joins the world's most popular cartoon                  
libraries-- Warner Bros. Looney Tunes and Hanna-Barbera Cartoons.               
It also reunites the pre-1948 Warner Bros. film library, owned by               
TBS, with the current Warner Bros. library.                                     

Levin and Turner added; "Within our extraordinary asset base lie                
complementary operating strengths that will generate                            
opportunities for domestic and international growth in children's               
and family entertainment, financial news, merchandising and                     
retailing, on-line services, film distribution and sports.  The                 
world's largest film library will now have access to the finest                 
collection of programming networks ever assembled, and the value                
of this library will be multiplied by the forthcoming digital                   
video disc.  Time Inc., the world's preeminent information                      
gatherer and publisher, will find new opportunities with CNN, the               
most trusted name in global television news.  Warner Bros.'                     
Looney Tunes and the Hanna-Barbera characters will create new                   
choices for audiences and customers on The Cartoon Network, The                 
WB and in Warner Bros. Studio Stores.  The cross-promotional                    
opportunities among our cartoons, Warner Bros. Studio Stores,                   
theme parks and networks will be a major contributor to growth.                 
In addition working together we intend to find new areas of                     
growth for WTBS."                                                               

Mr. Levin added, "Time Warner and TBS have worked long and hard                 
to make this combination a reality. The support and creativity of               
John Malone and Liberty Media have helped structure a transaction               
that will increase value for the shareholders of all the parties                
involved. For Time Warner, this combination is consistent with                  
our plan to strike the appropriate balance within Time Warner                   
between content and distribution. By bringing the growing cash                  
flow of TBS' content businesses into Time Warner, our balance                   
sheet will strengthen and our financial ratios will improve."                   

Under the terms of the agreement approved today by the Board of                 
Directors of each company, Time Warner Inc. will issue up to 178                
million common shares to acquire Turner Broadcasting System.  TBS               
shareholders will receive .75 Time Warner Inc. common shares for                
each TBS Class A and B common share.  Each TBS Class C preferred                
holder will receive .80 Time Warner common shares for each of the               
6 shares of Class B common that their class C preferred shares                  
are convertible into.   R. E. Turner will become vice chairman of               
Time Warner and head of the Time Warner Video Division which will               
consist of all the businesses of TBS plus have supervisory                      
responsibilities for the businesses of Home Box Office.  Mr.                    
Turner will have the right to designate two Time Warner Inc.                    
directors, one of whom will be himself.  As a result of the                     
merger which will be tax-free to TBS shareholders, Turner                       
Broadcasting System will become a wholly-owned subsidiary of Time               
Warner Inc.                                                                     

Subject to certain conditions, Mr. Turner and Liberty Media                     
Corp., a subsidiary of Tele-Communications Inc. (TCI) have agreed               
to vote their TBS shares for the merger.  In addition, TCI has                  
granted Time Warner an option to acquire TCI's TBS shares. The                  
Time Warner common shares received by Liberty Media Corp. will be               
exchanged for voting preferred stock economically equivalent to                 
common stock and placed in a voting trust. Liberty Media has                    
selected Time Warner Chairman Gerald M. Levin as the trustee.                   

Other agreement terms that become effective at the time of the                  
TBS merger closing include: The Time Warner board will amend the                
company's shareholder rights plan so that the 15% threshold will                
be calculated on a fully diluted basis. TBS  has agreed to extend               
carriage agreements with TCI covering all of Turner Broadcasting                
Systems' cable programming networks. TBS has agreed to sell its                 
interest in SportSouth, a regional sports cable network, to                     
Liberty Media Corp., for approximately $60 million. Time Warner                 
has agreed to issue 5 million common shares to TCI after the TBS                
merger closing in exchange for a 6-year option to purchase                      
Southern Satellite, Inc. which distributes WTBS to cable                        
operators. Time Warner will grant Liberty Media Corp. an option                 
to purchase Time Warner's interest in the Sunshine Network, a                   
Florida-based sports cable network, for $14 million.                            

The combined companies (including TWE) had 1994 revenues of $18.7               
billion and EBITDA of $3.4 billion.  Including Time Warner's                    
previously announced transactions primarily consisting of cable                 
system acquisitions and the sale of a 51% interest in Six Flags,                
1994 revenues would have been $19.8 billion and 1994 EBITDA would               
have been $4 billion.                                                           

The transaction is subject to, among other things, approval by                  
the Federal Communications Commission and regulatory review by                  
federal antitrust authorities, and approval by the shareholders                 
of both companies. It is expected to be completed in 1996.                      

Time Warner Inc. is the world's leading media and entertainment                 
company, with interests in magazine and book publishing, recorded               
music and music publishing, filmed entertainment, broadcasting                  
and theme parks and cable television and cable television                       
programming.                                                                    

Turner Broadcasting System, Inc. is one of the world's leading                  
suppliers of entertainment and news through its ownership of the                
world's largest film and animation libraries and of television                  
networks in the United States, Latin America, Europe and Asia.                  
The Company's operations also include motion picture, animation                 
and television production, theatrical film distribution, home                   
video, television syndication, licensing and merchandising,                     
publishing and professional sports.                                             

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘SC 13D/A’ Filing		Date		Other Filings
Filed on:		9/25/95
		9/22/95		8-K
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