If Twenty-First Century Fox succeeds in buying Time Warner Inc, it's likely to sell CNN and pay billions of dollars in taxes rather than go through the headaches of spinning the cable news channel off to shareholders of the merged company, according to people familiar with the matter.Fox plans to get rid of CNN because it already operates its own namesake news network and would likely face opposition from regulators even if it wanted to keep it. Potential buyers include CBS and Walt Disney's ABC - two broadcast news juggernauts in search of a cable news outlet.A sale would mean a tax hit of about 40 percent of the proceeds, which could range between $6 billion and $10 billion, according to tax experts and industry analysts. The entire sale price would be taxable because CNN is carried on Time Warner's books at near-zero, people familiar with the company said."That's an additional cost to the deal and that tax liability is going to reduce the amount they are able to pay to Time Warner shareholders," said corporate tax and accounting analyst Robert Willens, referring to Fox. The 40 percent figure comes from a combination of federal, state and local taxes, Willens said.
Twenty-First Century Fox, Inc., formerly News Corporation, is a diversified global media and entertainment company with operations in cable network programming; television; filmed entertainment; direct broadcast satellite television, and other, corporate and eliminations. Shares of FOXA fell by 0.33% or $-0.11/share to $32.81. In the past year, the shares have traded as low as $29.42 and as high as $36.43. On average, 13906000 shares of FOXA exchange hands on a given day and today's volume is recorded at 18561196.
Time Warner Inc. (Time Warner) is a media and entertainment company. Shares of TWX traded higher by 1.17% or $0.98/share to $84.99. In the past year, the shares have traded as low as $57.59 and as high as $88.13. On average, 7465530 shares of TWX exchange hands on a given day and today's volume is recorded at 5752057.
Source
