Time Warner Invest In Central European Media Biz

NEW YORK (AP) — Time Warner Inc. said Monday it will pay $241.5 million for a 31 percent stake in Central European Media Enterprises Ltd., the Bermuda-based broadcast company founded by cosmetics billionaire Ronald Lauder.

The company also said its Warner Bros. unit has formed a partnership with the company — which operates in Bulgaria, Croatia, Czech Republic, Romania, Slovakia, Slovenia and Ukraine — to launch new TV channels in Central and Eastern Europe.

The deal allows Lauder to vote Time Warner's shares of CME for at least four years with some exceptions. Lauder has agreed to support two of the company's nominees to CME's board.

Time Warner will receive 19 million newly issued common shares: 14.5 million class A shares at $12 each and 4.5 million class B shares at $15.

The announcement sent CME's Class A stock up $4.50, or 45 percent, to close at $14.50 Monday, while Time Warner shares rose 76 cents, or 9.7 percent, to $8.62.

The move comes as CME anticipates first-quarter results that are below Wall Street expectations. The company said separately Monday that it expects $135 million to $145 million in sales, compared with $223 million in the year-ago quarter. That fell well below the average Street forecast of $167.2 million, according to a Thomson Reuters survey.