For the first time since Ted Turner launched his hostile takeover bid for CBS Inc. last April, the pressure has shifted from the target to the bidder.
Unless Turner is able to mount a successful legal challenge to the billion-dollar stock buyback plan announced on July 3 by CBS, his non-cash takeover bid will no longer be viable. Provisions in the CBS plan blocks hostile takeover bids such as Turner's by restricting the amount of debt the company can have on its books.
In remarks last week at the National Press Club, Turner conceded that "the CBS move puts an incredible time pressure on us."
But that doesn't mean the battle is over. Turner has a reputation for beating the odds, as he has in ventures ranging from Cable News Network, his 24-hour cable news channel, to the America's Cup, where he has prevailed as a world champion yachtsman. And looming on the horizon is the possibility that the Atlanta broadcaster will launch a surprise, sweetened takeover bid for CBS that includes some cash, if he can find a willing partner with deep pockets.
When asked whether the antitakeover provisions adopted by CBS have made it so difficult to gain control of the company that he might throw in the towel, Turner said, " 'If we fail' doesn't exist in my vocabulary."
Turner's speech at the press club was his first public appearance to discuss the takeover battle. He had a lot to say, not only about the battle for corporate control, but also about CBS News, "60 Minutes," CBS Chairman Thomas H. Wyman and what it is like to be engaged in one of the most controversial takeover attempts ever.
CBS Chairman Wyman addressed Wall Street analysts and financial writers a week earlier in New York to announce the $954.8 million CBS stock buyback plan, a maneuver designed to defeat Turner's takeover bid while giving CBS stockholders more value for their shares. While Wyman did not attack Turner personally, as he did earlier this year when he said Turner lacked the "conscience" to own a major television network, he did attack Turner's takeover bid -- saying its heavy reliance on borrowing would be financially imprudent.
Last week, CBS received Securities and Exchange Commission approval to proceed with its plan to repurchase 21 percent of its stock for $150 a share. The company said the offer will expire on July 31, and Wall Street analysts have said they believe the CBS buyback will be completed successfully.
Meanwhile, Turner's lawyers were busy last week trying to block the CBS plan and trying to persuade the Federal Communications Commission to speed up its review of Turner's case. Turner needs FCC approval to proceed with his bid because acquiring CBS would entail the transfer of control of television broadcast licenses held by the company. The commission must approve all license transfers.
On Friday, the FCC turned down Turner's request to accelerate final approval of his takeover bid. The commission's review, which includes a study of Turner's character, the financial viability of his offer and the impact that his bid would have on diversity of ownership of media properties, will probably not be completed until sometime in September, FCC Chairman Mark S. Fowler said last week. The FCC said its review would include oral hearings on Aug. 1 and 2.
Since Turner is anxious to move ahead with his plan before CBS completes its stock buyback, he asked the FCC on Friday to give him interim approval to proceed. He said that prior to final approval, he would place any CBS stock purchased under his offer with a trustee.
Knowledgeable sources said they expect the FCC to grant Turner interim approval to proceed. However, they said it is unclear whether Turner will actually try to buy any CBS stock before he receives final approval.
Many people have characterized Turner's bid for CBS as a clash of personalities, of cultures and of a maverick versus the establishment. The accompanying remarks by Turner and Wyman, which illustrate that clash, were edited from their respective public appearances in Washington and New York recently, and from interviews with The Washington Post.