Why Turner merger worries FTC

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The possibility of Tele-Communications Inc. taking control of Time Warner is the biggest fear the Federal Trade Commission has about the Time Warner acquisition of Turner Broadcasting System, according to John Malone, TCI's president-CEO. Mr. Malone, speaking to Advertising Age today while in New York for an analysts meeting, said TCI has told the FTC that it could eventually acquire up to 25% of Time Warner stock if the deal goes through. TCI currently owns 23% of TBS, which would translate into 9% of Time Warner stock.

"We're very supportive of Jerry [Levin, Time Warner chairman-CEO] but we need the flexibility in case plans Jerry has don't work out," Mr. Malone said. He said the FTC is concerned that TCI, along with other major Time Warner shareholders, such as Gordon Crawford, senior VP of Capital Research and Management, might get together to take over Time Warner.

Though TCI will not negotiate its ability to acquire more Time Warner shares, Mr. Malone said, he still believes the Time Warner/TBS deal has a "70% chance of going through." As to reports that the FTC would want Time Warner/TBS to divest itself of one or more programming networks, Mr. Malone said that Mr. Levin would probably not agree to that. The TCI chief said talks with the FTC should continue until June 12, when he expects the FTC to make a ruling.

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