As the battle for Time Inc. ended its third week, the media giant rallied more political support to stymie a hostile bid by Paramount Communications.
Time said Sunday that the U.S. Conference of Mayors and attorneys general from 13 states have voiced concern that Paramount's bid will jeopardize local authorities' jurisdiction over cable television franchises.
The issue has arisen because Time controls the nation's second-largest cable TV company, and cable is regulated at various levels of government. The company also publishes such national magazines as its namesake newsweekly, Sports Illustrated and People.
Paramount, which last week raised its offer to $200 per share, has proposed acquiring shares of Time through a trust until permission to transfer cable franchises is obtained. Paramount has sought the permission of the Federal Communications Commission to establish the trust.
Delaware Decision Pivotal
While the FCC considers the request, Paramount and Time have continued to battle in public and in two state courts. Paramount stepped up its economic pressure by increasing its cash bid from $175 per share, but the next pivotal decision is expected in a Delaware court. Paramount has asked the Chancery Court to overturn Time's anti-takeover defenses, including its recent move to acquire Warner Communications for $14 billion.
On Sunday, Time released the contents of a letter from the non-partisan mayors' group, which did not take sides in the takeover battle. The mayors' organization did, however, urge the FCC "to take no steps" to undermine local governments' authority.
Time also announced that attorneys general from 13 states have filed a brief at the FCC arguing against any transfer of cable television licenses before state and local authorities exercise their right to review and approve them. California was not among the states represented in the brief.
Paramount responded to Time's announcements with a one-sentence reply: "As we have said several times before, despite the efforts of Time to stir up opposition with misinformation, we expect to get state and local cable franchise approvals in an orderly and expeditious way."