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News Corp., New World Reopen Talks

July 17, 1996|SALLIE HOFMEISTER | TIMES STAFF WRITER

News Corp. has reopened negotiations to acquire New World Communications Group, a transaction that would probably kill the expected marriage between New World and King World Productions, according to Hollywood and Wall Street sources.

None of the companies would comment on the speculation, but sources said New World owner Ronald Perelman and News Corp. chief Rupert Murdoch discussed terms of a deal late last week at a retreat for media moguls in Sun Valley, Idaho.

"It's not a done deal, but it's very active," said one source close to New World.

Sources speculated Tuesday that Perelman's talks with King World, a television syndicator that distributes such hits as "Jeopardy" and "The Oprah Winfrey Show," brought Murdoch back to the bargaining table.

Murdoch is keen on adding New World's 10 Fox TV stations to his Fox Broadcasting System's station group, a move that would give him the widest reach of any TV broadcaster in the U.S.

Previous negotiations between the two companies broke down last month because Murdoch was willing to spend only $23 a share for New World and Perelman was asking $29. New World closed Tuesday at $15.188 a share, down 31.25 cents.

When talks with News Corp. broke off, New World turned its sights to King World's $600 million in cash and its strong cash flow as a means of financing growth over the next few years.

Even as the renewed Murdoch-Perelman talks came to light, the boards of King World and New World met separately in New York on Tuesday to discuss their proposed merger, according to sources, who did not elaborate on the outcome of the meetings.

But industry executives say King World could ultimately be left out in the cold if Perelman and Murdoch reach an agreement.

A New World purchase of King World for a reported $1.5 billion would make a later acquisition by Murdoch more costly, while loading Fox up with two sets of production and syndication sales operations that overlap its own.

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