Two US networks' shares rise on takeover rumours

SHARES of the parent companies of two of America's three large television networks rose sharply on Wall Street yesterday after reports that they were again in takeover talks with entertainment groups Time Warner and Walt Disney Company.

NBC and its related cable networks, owned by General Electric, the big American industrial conglomerate, is said to be considering a merger with Time's Warner Brothers studio, in a deal valued at between dollars 2.5bn and dollars 3bn ( pounds 1.67bn to pounds 2bn).

A second report, which appeared in the New York Times, said that Disney would acquire CBS, whose dollars 5.4bn merger with the QVC cable-retailing group collapsed in July.

But company executives and several Wall Street analysts immediately poured cold water on the latest rumours, pointing to regulatory and financial obstacles. Although American media cross- ownership rules are soon to be relaxed, they will still stop a cable company that dominates a local market from owning a network.

NBC and CBS would also be obliged to sell their local broadcast stations, which rank among their most profitable assets.

Analysts suggest that debt-laden Time Warner, which still owes dollars 15bn as a result of its 1990 merger, might find it difficult to finance a dollars 3bn deal. But it is possible that General Electric, with its huge asset base and finance subsidiary, could fund the deal internally.

Robert Wright, NBC's chief executive, said the rumours were inaccurate and grandiose but conceded the network was talking to Time Warner about a number of possible ventures. Laurence Tisch, chief executive and controlling shareholder of CBS, denied he had had any discussions with Disney.