Ted Turner reported to be blocking MGM buy-out deal

Ted Turner, a board member at Time Warner Inc., is trying to stop the company from buying independent movie studio Metro-Goldwyn-Mayer, according to a published report.

The New York Post, quoting an unidentified source with the company, said that Turner is working behind the scenes to scuttle negotiations between the companies. MGM has been for sale for a number of months, and Time Warner and Sony are believed to be the two most serious, potential bidders for the studio assets - reports CNN Money.

The paper reported the Time Warner board authorized management to pursue a deal with MGM, but that Turner is still angry at MGM majority shareholder Kirk Kerkorian for a 1986 deal by Turner Broadcasting to buy MGM for $1.2 billion. That deal forced Turner to pile on debt and take in a group of cable investors, including Time Inc., and lose significant control over his empire. Time Inc. merged with Warner Communications to become Time Warner in 1990, and the combined company acquired Turner Broadcasting in 1996, which by then had shed MGM.

The Post reported that Turner still believes Kerkorian tricked him into overpaying for MGM, and he doesn't want to see Kerkorian become a large shareholder in Time Warner. Despite sharing much of his stake in Time Warner, Turner is still the largest individual shareholder at Time Warner with about 40 million shares. But the paper said if there is a deal to buy MGM, it will not be subject to Time Warner shareholder approval.

The paper says that Turner sees his role on the board as a voice of dissent, against what he sees as "dumb deals." But the paper said it is also likely he'll leave the board once the Securities and Exchange Commission completes its probe of accounting questions at its America Online unit.

Thanks to `Ken` for the alert.

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