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Block Talk No Worry for AOL, Time Warner

 

Even if America Online's (AOL Quote) buy of Time Warner (TWX Quote) encounters some static, investors should be in the clear.

Shares in both AOL and Time Warner slipped Tuesday following press reports that the Federal Trade Commission is likely to impose significant conditions on their impending merger. But at least some of the conditions are likely to center on customer access, an issue on which the companies have already broadly agreed to make amends. And observers say there's little in the latest news that suggests the merger runs serious risk of coming apart.

All Talk

"I think the main impact would be a chorus of groans," comments Merrill Lynch analyst Henry Blodget, in an email, about any delay. "I don't think you'd see much valuation impact -- AOL would likely be trading at a higher level as a stand-alone company," he writes. "The sooner the deal closes, the quicker they can begin working on synergies, strategy, etc., but the good news is the companies function well on their own."

Reversal
Time Warner rallies as AOL falls back
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