Turner Broadcasting System’s attempt to purchase the Home Shopping Network is on hold.
According to industry sources, Time Warner, a major shareholder in Turner with home shopping ambitions of its own, opposed the acquisition.
Turner was hoping to gain control of HSN through a stock swap. But because of the depressed price of its stock, which is lingering at a 12-month low of $ 19 a share, the deal was in trouble (Daily Variety, April 12) even before Time Warner , which holds 19.4% of the company, voiced its opposition at Turner’s board meeting Friday.
Turner’s drive to acquire HSN has brought to the fore the competing interests of major shareholders in the company, such as TW and Tele-Communications Inc. and its chairman, John Malone. TW and TCI each have three seats on the Turner board.
TCI, which holds about 22.3% of Turner, had supported the proposed acquisition. Indeed, per industry sources, the proposed deal was first brought to company chairman Ted Turner by TCI’s Malone, who is also chairman of Liberty Media, which owns 41.5% of HSN.
In addition, Liberty Media has a 28.2% stake in HSN’s main rival QVC. Malone wants to merge the two home shopping entities, but attempts to do so have faced regulatory roadblocks. According to industry sources, Malone lobbied for the deal because it would help him avoid some regulatory heat, meanwhile upping TCI’s Turner stake with the stock swap.
However, QVC chairman Barry Diller has a different agenda. According to industry sources, the Diller camp believes it could eventually get Washington to go along with a QVC/HSN merger.
None of this means Turner will abandon its HSN quest. “It took time to get the board to come around to other deals,” says a Turner insider. “The New Line and Castle Rock acquisitions all took time to engineer past the opposition.”