- The Washington Times - Monday, March 23, 2009

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 $2.93, or 29 percent, to $12.93 in morning trading, while Time Warner shares edged up 38 cents, or 4.8 percent, to $8.24.

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.

“Advertisers have been cautious with their expenditure in response to rapidly changing conditions and the strength of the U.S. dollar,” Adrian Sarbu, the company’s chief operating officer, said in a statement. “As a result, the first quarter of 2009 has been extremely challenging.”

Falling TV revenue may result in a write-down in the value of some of its assets, the company said.

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