The Federal Trade Commission has agreed to loosen restrictions on Liberty Media Corp.’s ownership of stock in Time Warner Inc.
Liberty got the 171 million shares in connection with Time Warner’s takeover of Turner Broadcasting System.in 1996. Liberty and its then-parent company, Tele-Communications Inc., were major Turner shareholders.
Since Time Warner was paying with its own stock, antitrust regulators insisted that a media company the size of Liberty could only get non-voting shares. But Liberty now wants to lend the $3.5 billion worth of shares to an investment bank that will pay fees and, in turn, probably re-lend the shares to other investors, including short sellers. For that, Liberty needs to convert the stake into voting stock.
The FTC granted Liberty’s request, but only if Liberty has no say in how the shares are used or voted.