$213 mil deal paves way for transformation
Time Warner Corp. closed a deal on Thursday to pay $213 million in cash to acquire Southern Satellite Systems Inc. from Liberty Media Group, further paving the way for TBS Superstation’s imminent conversion from a superstation to a free-market basic cable service.
Southern Satellite provides satellite uplink and distribution services for TBS. Time Warner had previously indicated that it planned to exercise its purchase option for the company (Daily Variety, Sept. 17).
In a statement released Thursday, Time Warner stressed that it had held out the option of using common stock to acquire Southern Satellite but decided instead to use cash due to the “strong overall financial performance of its businesses and its belief that its stock remains undervalued” in spite of price appreciation this year.
TBS is slated to switch over from its superstation status — dating back to its days as Atlanta independent station WTBS — to a conventional cable service on Dec. 31, enabling the network to extract carriage fees from operators for the first time. Turner Broadcasting has already made several carriage deals with MSOs covering the TBS relaunch.