The Federal Communications Commission yesterday canceled hearings that were to be held today and tomorrow to review Ted Turner's controversial non-cash takeover bid for CBS Inc. because the bid is dead.
Responding to an emergency petition filed by CBS to cancel the hearings, the FCC said they "would not be the most appropriate course of action at this time."
Turner was seeking FCC approval to proceed with his takeover bid since the commission must approve the transfer of radio and television licenses held by CBS.
Turner's original hostile takeover attempt died in an Atlanta federal courtroom Tuesday afternoon when Judge Robert L. Vining Jr. turned down his request for an injunction to block the $954.8 million CBS stock buyback plan.
The CBS stock buyback plan includes provisions, such as a restriction on the amount of debt the company can have on its books, which make it impossible for Turner to complete his non-cash takeover bid for the company.
His bid consisted primarily of high-yield securities known as junk bonds.
Turner said yesterday that while he is disappointed that the FCC canceled the hearings, he intends to continue to seek control of CBS and will inform the FCC of his revised plan after evaluating his options.
Turner has said he will try to restructure his takeover bid by soliciting partners who could add cash to his proposal.
Turner, who unsuccessfully attempted to raise $2.6 billion in cash to sweeten his bid earlier this month, said this week that if he is unable to raise the money to acquire CBS, he will try to win control of the company by launching a proxy fight next year.
In a proxy fight, Turner would try to gain control of the CBS board of directors by soliciting votes for his own slate of directors.
This takeover technique would not require Turner to raise the billions in cash he now needs to acquire control of CBS by purchasing shares.
The CBS stock buyback plan that killed Turner's bid was successfully completed at midnight last night.
Turner's lawyers were unable to convince Judge Vining that antitakeover provisions that were part of the plan unlawfully entrenched the current management. Turner is appealing Judge Vining's ruling, but legal experts said privately the appeal has no chance of succeeding.
CBS has been the target of takeover speculation since January when a conservative group supported by Sen. Jesse Helms (R-N.C.) said it wanted to gain control of the company to end what it believes is a "liberal bias" in CBS network news coverage. The company said yesterday that it was pleased with the FCC's decision to cancel the hearings.
"CBS believes the commission's action recognizes the effect of Judge Vining's decision and Turner's own statement that his offer must be withdrawn," said CBS Senior Vice President William Lilley III. "The Turner offer is dead.
"We had a major, major surprise witness and were ready to go on with the FCC hearings. We had planned an August surprise, but we'll take the cancellation instead."