The Federal Communications Commission plans to turn down Atlanta broadcaster Ted Turner's request to accelerate its review of his hostile takeover bid for CBS Inc. and expects instead to complete its review in September, FCC Chairman Mark S. Fowler said yesterday.
Turner, who needs FCC approval to proceed with his takeover bid, asked the commission last Friday to grant final approval of his application by July 15, so that CBS stockholders may have a "level playing field" on which to compare the merits of his offer with the CBS stock buyback plan announced last week.
Turner said on Tuesday that if CBS successfully completes the $954.8 million stock buyback, it will be "difficult, if not impossible for our offer, or any other offer similar to it, to have any chance whatsoever." The reason is that the CBS stock buyback plan includes provisions restricting the amount of debt the company can have on its books, and Turner's non-cash offer would violate those provisions.
During a question-and-answer period before the House subcommittee on telecommunications, consumer protection and finance yesterday, Fowler said it was unlikely that Turner would be granted final approval to proceed by the end of this month, which is the date the CBS stock buyback offer is scheduled to expire.
"I would hope to be done with the review of Turner's application early this fall," Fowler said. " . . . We're looking at all the considerable pleadings that have been filed by CBS and others opposing Turner. Our hope is that we can get this up before the full commission sometime in September."
In prepared remarks before the House subcommittee yesterday, Fowler said the FCC plans to hold oral hearings to review Turner's takeover bid later this summer. Knowledgeable sources believe the FCC will make a final decision on Turner's application this fall after brief hearings, but CBS and certain members of Congress are urging the commission to hold lengthy "evidentiary" hearings that could delay a final decision on Turner's FCC application for many months.
"The commission currently has the Turner application and these filings under careful review," Fowler said yesterday. "Additionally, we are planning to afford an opportunity for oral presentations to the commission later this summer to further explore the issues raised in the pleadings. I want to stress that these presentations would neither constitute nor take the place of an evidentiary hearing; however, we hope that they will aid the commission in determining whether material and substantial issues of fact exist that would require a hearing."
Fowler did not indicate yesterday what the FCC plans to do about the other requests made by Turner on Friday. Turner asked the FCC Friday to block the CBS stock buyback plan, saying it violates the law by transferring authority to make important decisions from the company's stockholders to its board of directors without commission approval. Turner also asked the FCC Friday to approve a new "short form" application he filed, a move that could give his bid interim approval to proceed until the FCC makes a final decision this fall.
But if Turner is unable to block the CBS stock buyback plan, as he is attempting to do both at the FCC and in a federal court in Atlanta, his current bid would no longer be viable, as he indicated earlier this week. Turner's takeover bid offers CBS stockholders a complex package of securities, including high-yield securities known as junk bonds, in exchange for CBS stock. His current offer, which includes no cash, is valued at about $150 a share by Wall Street analysts. Turner said on Monday that he is keeping all of his options open, hinting that he will try to submit a revised takeover bid for CBS that includes some cash, if he is able to find a wealthy partner.