FTC Ends Probe of FNN-CNBC Merger Plan
Apr. 18, 1991
WASHINGTON (AP) _ The Federal Trade Commission on Thursday closed an antitrust investigation of the proposed acquisition of Financial News Network by its main rival without filing any objections to such a deal.
But the outcome of the fight for control of FNN remained in doubt.
A bankruptcy judge had accepted a $115 million offer for FNN from NBC's rival Consumer News and Business Channel pending FTC approval.
The judge also disqualified a competing bid from a partnership of Dow Jones & Co. Inc. and the Group W Satellite Communications division of Westinghouse Broadcasting Co.
But on Wednesday, a federal court overturned that ruling and ordered the bankruptcy court to consider both bids to determine which is in the best interest of FNN, creditors and shareholders.
The FTC had asked the bankruptcy court in March to withhold final approval of the merger until the commission had completed its review.
At the time, the commission told the bankruptcy court the proposed transaction ''would eliminate CNBC's only competitor'' in 24-hour financial and business programming.
Thursday's commission action closing the case came on a 3-1 vote, with Commissioner Andrew J. Strenio Jr. dissenting.
Strenio and Commissioner Mary L. Azcuenaga said they would have supported a motion authorizing the commission staff to seek a preliminary injunction blocking the investigation.
Azcuenaga voted to close the investigation after it became apparent there was not majority support for a preliminary injunction.
CNBC agreed in February to buy FNN for $105 million, topping a bid from the Dow-Westinghouse partnership of $90 million. FNN's parent, Financial News Network Inc., sought protection of the bankruptcy court on March 1.
The Dow-Westinghouse partnership subsequently raised its offer to $115 million, but its bid was disqualified by the bankruptcy judge because the partners refused to keep it open until May 31 as CNBC offered.
CNBC raised its bid to $115 million after unsecured creditors complained the judge had not selected the best offer available.
The FTC's decision was welcomed by CNBC.
Tom Rogers, president of NBC Cable and business development, said, ''We look forward to an early closing of this transaction and the opportunity to provide strengthened programming for viewers.''
Peter Skinner, senior vice president for Dow Jones, said, ''We are disappointed. We thought the federal antitrust enforcers would see the obvious.''
CNBC plans to merge FNN and CNBC into a single network if it buys FNN. The Dow-Westinghouse partnership would operate FNN as a competitor to CNBC.
Skinner said the partnership is still considering filing a private lawsuit challenging any FNN-CNBC deal on antitrust grounds although no decision had yet been made.
Financial News Network's biggest shareholder is Infotechnology Inc., which owns a 46 percent stake in FNN. Infotechnology also owns 97 percent of financially troubled United Press International, which is also up for sale.
Its chief executive officer, Pieter VanBennekom, told the news service's staff in a memorandum Thursday: ''I am more confident now than at any time in the recent past that the corporate future of UPI can be resolved'' in time to avoid liquidation.
He declined to give details, but said ''a deal inspiring the confidence of everyone inside and outside UPI may be at our fingertips.''