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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 6, 1996
Date of Report (Date of earliest event reported)
TURNER BROADCASTING SYSTEM, INC.
(Exact name of registrant as specified in its charter)
Georgia 0-9334 58-0950695
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One CNN Center, Atlanta, Georgia 30303
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 827-1700
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
As previously reported, Turner Broadcasting System, Inc., a Georgia
corporation ("TBS"), has entered into an Amended and Restated Agreement and
Plan of Merger dated as of September 22, 1995 (the "Merger Agreement") among
TBS, Time Warner Inc. ("Time Warner"), TW Inc., a Delaware corporation and
currently a wholly-owned subsidiary of Time Warner ("New Time Warner"), Time
Warner Acquisition Corp., a Delaware corporation ("Delaware Sub"), and TW
Acquisition Corp., a Georgia corporation ("Georgia Sub"), which provides for a
transaction in which TBS and Time Warner will each become a wholly-owned
subsidiary of a new holding company. Pursuant to the Merger Agreement, (a)
Georgia Sub will be merged into TBS (the "TBS Merger"), (b) each outstanding
share of Class A Common Stock, par value $0.0625 per share, of TBS and each
share of Class B Common Stock, par value $0.0625 per share, of TBS (other than
shares held directly or indirectly by Time Warner or New Time Warner or in the
treasury of TBS and other than shares with respect to which dissenters' rights
are properly exercised) will be converted into 0.75 of a share of common stock,
par value $.01 per share, of New Time Warner ("New Time Warner Common Stock"),
(c) each share of Class C Convertible Preferred Stock, par value $.125 per
share, of TBS (other than shares held directly or indirectly by Time Warner or
New Time Warner or in the treasury of TBS and other than shares with respect to
which dissenters' rights are properly exercised) will be converted into 4.80
shares of New Time Warner Common Stock, (d) Delaware Sub will be merged into
Time Warner (the "TW Merger" and together with the TBS Merger, the "Mergers"),
(e) each outstanding share of common stock, par value $1.00 per share, of Time
Warner, other than shares held directly or indirectly by Time Warner, will be
converted into one share of New Time Warner Common Stock, (f) each outstanding
share of each series of preferred stock of Time Warner, other than shares held
directly or indirectly by Time Warner and shares with respect to which
appraisal rights are properly exercised, will be converted into one share of a
substantially identical series of preferred stock of New Time Warner having the
same designation as the shares of preferred stock of Time Warner so converted,
(g) each of Time Warner and TBS will become a wholly-owned subsidiary of New
Time Warner and (h) New Time Warner will be renamed "Time Warner Inc."
After an extensive review of the Mergers by the staff of the Federal
Trade Commission (the "FTC") and in order to eliminate certain concerns raised
by the staff of the FTC regarding possible competitive effects of the Mergers
and the related transactions, TBS, Time Warner, Tele-Communications, Inc.
("TCI") and Liberty Media Corporation ("LMC") have executed the Agreement
Containing Consent Order (including the related Interim Agreement, the "FTC
Consent Decree") dated August 14, 1996 and have submitted the FTC Consent
Decree to the commissioners of the FTC. The FTC commissioners have not yet
initially accepted the FTC Consent Decree, and the obligations of Time Warner,
TBS and TCI to consummate the Mergers are conditioned upon such initial
acceptance. The FTC Consent Decree contains provisions (i) restricting the
amount and type of New Time Warner securities that TCI and its affiliates may
hold after the consummation of the Mergers, (ii) limiting the duration of
agreements for mandatory analog carriage by TCI cable systems of TBS
programming services, and (iii) restricting certain actions by New Time Warner
after the consummation of the Mergers with respect to the distribution and
pricing of programming services. If the FTC does not initially accept the FTC
Consent Decree, the FTC may seek to enjoin the consummation of the Mergers. If
the FTC does initially accept the FTC Consent Decree, the FTC will publish the
FTC Consent Decree for public comment for a period of 60 days. If the FTC does
not finally accept the FTC Consent Decree after the period for public comment,
the FTC could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking the divestiture of
substantial assets of TBS or its subsidiaries or Time Warner or its
subsidiaries. If finally accepted by the FTC, the FTC Consent Decree will
terminate on the tenth anniversary of such final acceptance. A copy of the FTC
Consent Decree is attached as Exhibit 99.1 hereto and incorporated herein by
reference.
In connection with the FTC Consent Decree, the parties to the Merger
Agreement entered into Amendment No. 1, dated as of August 8, 1996, to the
Merger Agreement, which provides for (i) certain changes required by the terms
of the FTC Consent Decree, (ii) certain recent changes and proposed changes in
the capital structure of Time Warner, and (iii) the extension of the
expiration date of the Merger Agreement to December 31, 1996. A copy of
such Amendment No. 1 is attached as Exhibit 2.1 hereto and incorporated herein
by reference. The Merger Agreement, as amended by such Amendment No. 1, is
referred to herein as the "Amended Merger Agreement".
Also in connection with the execution of the FTC Consent Decree, TBS
terminated an agreement to extend, upon the consummation of the Mergers,
existing affiliation agreements pursuant to which TCI and its affiliates
distribute TBS programming services. In lieu thereof, TBS entered into an
agreement relating to the carriage after the consummation of the Mergers by
TCI-affiliated cable systems of Headline News and WTBS (following the conversion
of WTBS to a copyright-paid cable television programming service), certain
conditional rebate arrangements available to TCI-affiliated cable systems with
respect to other TBS programming services and certain other related matters.
Also in connection with the Mergers, certain subsidiaries of TBS and
certain affiliates of TCI have entered into agreements which provide for the
exhibition, on a non-exclusive basis, of all motion pictures theatrically
released during the term of such agreements by New Line Cinema Corporation,
Castle Rock Entertainment and Turner Pictures Worldwide, Inc. on pay-per-view
services owned by such TCI affiliates.
To ensure compliance with the FTC Consent Decree, Time Warner, New
Time Warner, LMC and certain subsidiaries of LMC entered into the Second
Amended and Restated LMC Agreement, dated as of September 22, 1995 (the "LMC
Agreement").
As a result of an arrangement among R.E. Turner, TBS and Time Warner
and pursuant to the LMC Agreement, holders of a sufficient number of
shares of the TBS capital stock have agreed to vote all of the shares owned by
them in favor of the approval of the TBS Merger, the Amended Merger Agreement,
and the other transactions contemplated by the Amended Merger Agreement to
assure approval by the TBS shareholders, regardless of the vote of any other TBS
shareholder.
As previously reported, in connection with the Mergers, TBS and LMC
Southeast Sports, Inc. ("LMC Sports") entered into a stock purchase agreement
(the "SportSouth Agreement") pursuant to which TBS will sell to LMC Sports all
of the outstanding capital stock of Turner Sports Programming, Inc. which owns a
44% interest in SportSouth Network, Ltd. The SportSouth Agreement was not
amended in connection with the FTC Consent Decree, remains in effect and the
transaction thereunder continues to be conditioned upon the consummation of the
Mergers.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The following items are filed with this report:
Exhibit Number Description
2.1 Amendment No. 1, dated as of August 8, 1996,
to the Amended and Restated Agreement and Plan
of Merger dated as of September 22, 1995, among
Time Warner Inc., TW Inc., Time Warner Acquisition
Corp. TW Acquisition Corp. and Turner Broadcasting
System, Inc.
99.1 Form of Agreement Containing Consent Order, dated
August 14, 1996, among Time Warner Inc., Turner
Broadcasting System, Inc., Tele-Communications, Inc.,
Liberty Media Corporation and the Federal Trade
Commission.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
TURNER BROADCASTING SYSTEM, INC.
(Registrant)
Date: September 6, 1996 By: /s/ William S. Ghegan
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Name: William S. Ghegan
Title: Vice President and Controller
and Chief Accounting Officer
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EXHIBIT INDEX
Exhibit Number Description
2.1 Amendment No. 1, dated as of August 8, 1996,
to the Amended and Restated Agreement and Plan
of Merger dated as of September 22, 1995, among
Time Warner Inc., TW Inc., Time Warner Acquisition
Corp., TW Acquisition Corp. and Turner Broadcasting
System, Inc.
99.1 Form of Agreement Containing Consent Order dated
August 14, 1996, among Time Warner Inc., Turner
Broadcasting System, Inc., Tele-Communications, Inc.,
Liberty Media Corporation and the Federal Trade
Commission.