Time Inc.’s Entry into the Entertainment Industry (A)

Case Solution

Lisa Meulbroek
Harvard Business School ()

Richard Munro, President and CEO of Time Inc., faces a hostile takeover bid from Paramount Communications. Paramount conditioned its offer to cancel Time’s plans to merge with Warner Communications. A few months before Paramount’s hostile bid, Time had announced its plans to merge with Warner after carefully sifting through a full list of potential partners, including Paramount. The board supported Munro’s decision to merge with Warner as the two companies had a wide range of complementary assets. If Time went ahead with its plans to merge with Warner, Time shareholders would give up at least $ 175 per share in cash and possibly more. On the other hand, a merger with Paramount was not part of Time’s long-term strategy. Munro must recommend a specific course of action to the board at its emergency meeting. The case is written from the perspective of time managers. Should Time managers oppose Paramount’s offer?

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