Time, Inc. 's Entry into the Entertainment Industry (A)
On June 7, 1989, Time,
写留学论文Inc.'s chairman and chief executive officer, Richard Munro, called an emergency meeting of the board of directors for the next day. Munro had just received a letter from Martin S. Davis, chairman and chief executive officer of Paramount Communications, Inc.:
We have today commenced a cash tender offer for all of Time's outstanding shares at $175 per share. This price represents a premium of more than 60 percent over the price of Time's shares at the time you announced your proposed transaction with Warner. We believe our offer provides extraordinary value to all of your shareholders as well as to our own.Together, we will be a communications company rich in resources and with unparalleled range and depth. We will be strongly positioned for global growth through the next decade and into the next century. No other company will be as significant a force in entertainment and publishing with operations in quality magazine and book publishing, as well as in motion picture and television production and distribution, cable systems and cable programming. The fit is superb.l
Paramount had conditioned its bid on cancellation of Time's plans to merge with Warner Communications. Time had announced the plans on March 4, 1989, after careful consideration of a comprehensive list of possible partners, including Paramount. The board endorsed Munro's decision to merge with Warner because the two firms held a wide range of complementary ass~ts. Munro wondered how Time should respond to Paramount's hostile bid and what specific course of action he should recommend to the board at its emergency session.
This case was prepared by Professor Lisa K. Meulbroek with the assistance of Research Associates
Carolyn Hart and Jane Katz.
Copyright © 1993 by the President and Fellows of Harvard College:
Harvard Business School case 293-117 ..
1. Paramount Communications Inc.
v.
Time Inc., Civil Action No.
10670, Delaware Chancery Court,
Finkelstein deposition, Exhibit 12.
683
684 Mergers, Acquisitions, Restructurin'gs, and
Corporate GovernanceTime, Inc.,Time, Inc. was formed in 1924 when Henry Luce and Briton Hadden resigned their reporting jobs at the Baltimore News to publish their new magazine Time. During the next 35 years, Luce and Hadden grew their firm by introducing new magazines, including Life, and by acquiring established publications. A series of acquisitions in the
.late 1970s and 1980s had both strengthened the firm's presence in its established markets and diversified its activities outside the publishing industry (See Exhibit 1)., By 1989 the firm had refocused on its core publishing business and renewed its commitment to leadership as an originator of news and entertainment for consumers around the world. Time published magazines and books, distributed cable television programming, and operated local cable television franchises. Exhibits 2 and 3 show financial results by line of business.
Magazines (42% of revenues)
Time was the largest publisher of general circulation magazines in the United States, with 15 titles, including Sports Illustrated, People, Fortune, and Money, as well as Time and Life. Time's magazines accounted for more than 20% of
advertising in U.S. consumer magazines each year. Foreign editions of Time and Fortune were published through joint ventures.
Books (15% of revenues)
Time distributed books through fi
本论文由英语论文网提供整理,提供论文代写,英语论文代写,代写论文,代写英语论文,代写留学生论文,代写英文论文,留学生论文代写相关核心关键词搜索。