Weather Channel may be GE's prize as Time Warner balks

4:08 PM, June 13, 2008

From Times staff writer Meg James:

Everybody talks about the weather. Time Warner has decided not to do anything about it.

The media giant today withdrew its bid for the Weather Channel, leaving only General Electric Co.'s NBC Universal unit and its partners as potential buyers for one of the most widely available cable channels in the U.S.

In late afternoon, privately held Landmark Communications, which owns the Weather Channel, weather.com and several newspapers, announced that it had entered into exclusive negotiations with the NBC Universal consortium, which includes private equity firms Blackstone Group and Bain Capital.

Landmark's decision earlier this year to auction the Weather Channel hasn't turned out to be the slam-dunk some on Wall Street anticipated. The early line was that the property could fetch as much as $5 billion -- an amount that most media companies immediately determined to be unrealistic.

Initial bids came in around $3 billion to $3.5 billion, according to people close to the negotiations. Companies that expressed interest early on, including CBS Corp. and Liberty Media, quickly stepped back.

By early this month, the auction was down to just two bidders: Time Warner, which owns the cable channels CNN, TBS, and TNT, among others; and the NBC Universal group.

Time Warner declined to discuss its decision to withdraw. But Chief Financial Officer John Martin said last week the world's largest media company would be "extremely price disciplined and price sensitive" in its pursuit of the company.

The stock market apparently thought that was the right approach: Time Warner's shares jumped 52 cents, or 3.5%, to $15.43 today, while GE edged up just 10 cents, to $29.15, after hitting a 52-week low on Thursday.