LONDON (Brand Republic) – Time Warner and AT&T are believed to be locked in a battle about the price at which Time Warner can buy back the telecom firm’s 25% holding in Time Warner Entertainment -– the division that owns its cable systems and HBO cable channel.
Time Warner is said to have offered £4bn for the holding. AT&T is believed to want $20bn. Analysts have put a $12bn price tag on the interest.
The Federal Communications Commission is understood to have received a letter from the chairman of the Senate judiciary committee in Washington expressing concerns about the link between Time Warner and AT&T, the US’s two largest cable companies. This letter could further jeopardise Time Warner’s planned merger with AOL.
However, Time Warner is not expected to give in to pressure and raise its offer until buying back the stake becomes a condition of AOL deal.
AT&T lost its voting rights in Time Warner Entertainment earlier this year when it began the process of acquiring cable company MediaOne.
Meanwhile, the Federal Communications Commission has suspended its investigation into the AOL/Time Warner merger until the US anti-trust authorities, the Federal Trade Commission, has ruled on the deal.
The FTC is understood to be finalising the conditions to be imposed upon the deal before it can take place without unfairly dominating the internet access market. It is expected to reach its decision in two weeks.