Atlanta broadcaster Ted Turner unexpectedly withdrew his request for interim Federal Communications Commission approval to proceed with his hostile takeover bid for CBS Inc. yesterday.
Turner and his advisers apparently decided they were not yet ready to try to begin purchasing CBS shares, because FCC sources had indicated that they planned to grant Turner interim "short form" approval to proceed soon. One strategic reason for withdrawing the request was that the FCC might not look favorably on Turner in the future if they granted him interim approval and he did not rapidly proceed with his offer.
The surprise announcement by Turner was made only days after he urged the commission to grant him interim "short form" approval so he could proceed with his bid at the same time that CBS is conducting its $954.8 million stock buyback plan. In a prepared statement yesterday, Turner said one reason his request was withdrawn was that it appears that the FCC plans to move quickly by acting on his request for final FCC "long form" approval to proceed in mid-September.
The FCC must approve any change in control of broadcast licenses held by CBS. But even if Turner gets final FCC approval to go ahead, he probably will have to sweeten his offer to make it viable, because CBS is proceeding with a stock buyback plan that includes provisions that restrict the amount of debt the company can have on its books. Turner's current bid, which relies primarily on borrowing, would violate those restrictions.
Turner lawyer Charles D. Ferris said yesterday that another reason the request for interim approval was withdrawn was that the restrictive terms under which Turner would have been allowed to proceed could have given CBS an advantage in the takeover battle. Ferris said that under interim FCC approval, Turner would have been required to hold the CBS shares he purchased in a special trust that limited his flexibility until he received final FCC approval, a situation that could have placed him at a disadvantage in the event that CBS took steps to fight the takeover bid. Turner still is trying to block the CBS $150-a-share stock buyback plan in federal court in Atlanta, where a hearing is scheduled for July 24.