Time Warner Eyes Vice Media Stake

Deal Could Value Media Net at $2.2B
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Time Warner Inc., is reportedly in talks to acquire a large stake of multi-platform media network Vice Media, in a deal that could value the company at more than $2 billion.

According to people familiar with the process, the two companies have been talking for weeks, but have hit a snag as to how to actually put the two entities together. As reported first by Sky News on Monday, one possible scenario is for Time Warner to “inject” its HLN news network into Vice Media in return for half of the combined company. But other scenarios range from adding Vice Media shows to certain Time Warner networks, to creating a more formal structure between the two companies where Vice would contribute more programming for the network in exchange for Time Warner taking a financial interest in Vice. Or the two could choose to not do a deal at all.

But according to people familiar with both companies, they are motivated to doing a deal. Those people added that Vice shows could find their way on other Time Warner networks, not just HLN.

“That is where the talks are focused,” said one person familiar with the negotiations.

 While some reports have said that a potential hurdle to the deal is 21st Century Fox’s 5% stake in Vice Media, people familiar with the process said it is unlikely to scrap a combination. Those people said Time Warner was not looking to take a majority stake in Vice, and though buying out Fox would be “cleaner,” the two companies could peacefully co-exist.

According to the Sky News report, combining Vice Media with HLN would value the company at about $2.2 billion. Headed by founder and CEO Shane Smith (pictured) who started Vice in 1994 as an alternative music magazine tracking the Montreal scene, Vice Media has since expanded to include TV, a record label, an advertising agency and online video offerings. The company has a deal with HBO for a self-named documentary series, which was recently renewed for two additional seasons.

News of the deal came just hours after Time Warner completed the spin-off of its publishing unit—Time Inc. – as a separate publicly traded company. The company first announced in March its intention to spin the unit to shareholders. Time Inc. (Ticker Symbol: TIME) finished it first day of official trading June 9 at $23.30 per share, down about 1% each. The stock continued to fall on June 10, closing at $22.70, down 2.6% (60 cents each).