Atlanta broadcaster Ted Turner said yesterday that if CBS Inc. successfully completes its $954.8 million stock buyback plan, it will be "difficult if not impossible for our offer, or any other offer similar to it, to have any chance whatsoever."
Turner made the remarks about the damaging impact that the CBS recapitalization plan may have on his hostile takeover bid during a luncheon speech yesterday at the National Press Club. However, while admitting that his non-cash takeover proposal has little chance of succeeding unless he can put legal obstacles in CBS's way, he showed no signs of abandoning his fight to gain control of the network.
For example, while refusing to comment on reports that he is seeking wealthy partners who could help him launch a sweetened bid for CBS that includes cash, Turner said he is keeping all of his options open, adding that when he was a boy, he learned "that if at first you fail, try, try again."
"The CBS move last Wednesday announcing the stock buyback , which expires on the 31st of this month, puts incredible time pressure on us," Turner said.
Under the buyback plan, CBS said it will offer $150 a share, made up of $40 in cash and $110 in notes, for 21 percent of its oustanding common stock. The CBS plan includes provisions that block Turner's bid for the company by restricting the amount of debt the company can have on its balance sheet. It is designed to make it impossible for any highly leveraged takeover bid that does not have the support of the company's directors to succeed.
Turner, who owns a controlling interest in Cable News Network, the WTBS Superstation and the Atlanta Braves, has no cash in the takeover proposal he recently mailed to CBS stockholders. Instead of cash, his bid offers a complex package of securities, including high-yielding junk bonds, in exchange for CBS stock.
Wall Street analysts have estimated that Turner's bid, which includes a plan to sell many of CBS' non-broadcasting businesses to help finance the takeover, is worth about $150 a share. He has said he will not purchase any CBS shares until he receives Federal Communications Commission approval to proceed.
Turner was highly critical of the CBS stock buyback plan yesterday, saying that it violates basic principles of corporate democracy by taking away the right of CBS stockholders to consider his takeover bid. Turner said the plan includes "poison pill" provisions restrictions on the amount of debt CBS can have on its balance sheet that entrench management by making it impossible for a hostile takeover bid like his to succeed.
Turner compared the CBS use of the "poison pill" to the decision by German Nazi political leader Hermann Wilhelm Goering to commit suicide in Nuremberg in 1946 the night before his scheduled execution. "The last guy I can think of who took a poison pill was Hermann Goering," he said.
Turner, who said the takeover bid has cost his company about $15 million so far, also accused CBS of being "arrogant."
CBS has been the target of takeover speculation since a conservative group backed by Sen. Jesse Helms (R-N.C.) said in January that it would attempt to gain control of the network to end what it believes is a "liberal bias" in CBS network news coverage. The group, which has indicated it supports Turner's takeover bid, has repeatedly accused CBS television news anchorman Dan Rather of having a liberal bias. Turner said yesterday that if he acquires control of CBS, he would keep Dan Rather.
"I have no plans to get rid of Dan Rather," Turner said. "In fact, I have never met him. . . . He doesn't look like such a bad guy to me. I don't know much about him, and I don't watch him regularly, but I am looking forward to meeting with him someday. I don't intend to fire him."