HANDS ACROSS THE CABLE

THE PRIZE UP FOR GRABS, TED Turner's cable empire, was so enviable that two of America's most fearsome bosses tried to make pre-emptive bids for it. Both made their proposals in secret. First came General Electric's Jack Welch, who pitched a dramatic cost-cutting plan. Then, at almost the last minute, came Fox chief Rupert Murdoch, who offered Turner the chance to write his own ticket.

The courting finally produced a winner last week when the most ardent suitor, Time Warner, prevailed after five weeks of dealmaking. But not before two simultaneous and highly contentious board meetings took place in New York City, one at Time Warner headquarters, the other at Turner's law firm, each ending quite differently--one in shouts, the other in murmurs.

The board of Time Warner convened on the 29th floor of the company's headquarters in Rockefeller Center, attended not only by the directors but, according to board member Henry Luce III, by "uncountable lawyers and investment bankers" as well. Chairman Gerald Levin, says Luce, "very much was taking the initiative. There were many questions, incredibly difficult technical points." He admits, "It wasn't clear, at least to me, at the beginning of the meeting that the transaction would be approved."

The director asking the tough questions was Donald Perkins, former chairman of the Jewel food store company, who insisted that outside directors hire their own lawyer to help protect them against potential shareholder lawsuits. That irritated Levin, who seemed to feel that the outside directors were exhaustively scrutinizing his presentation of the facts, according to a board member. The biggest issue for Perkins was the uncertain influence of cable king John Malone, whose 21% holding in Turner Broadcasting would be converted via a complex structure to a nearly 9% stake in Time Warner. The discussions went on over three days, at times breaking into separate groups of inside and independent directors to discuss the minutiae of power and control. At the end, all 15 directors murmured either "aye" or "yes." Then, with little ceremony, they adjourned. Says Luce: "We had nothing further to say to each other."

The Turner Broadcasting board meeting, across town in the offices of the company's law firm, Skadden, Arps, Slate, Meagher & Flom, was anything but calm. "It was full of drama," says Robert Shaye, chairman of New Line Cinema and a member of the board. "The kind of stuff," he adds, "that good boardroom TV movies are made of." At one point, Brian Roberts of Comcast Corp. and Timothy Neher of Continental Cablevision, both directors of Turner with stakes in the company, walked out of the talks because they felt they didn't have the leverage to get the same kind of concessions in the deal as their competitor Malone. "After a lot of soul searching and caucusing, they determined that they were too conflicted to actually take part," says one of their colleagues. No, it was not true that they stormed out, says an executive who watched their departure, "but they weren't wasting any time in leaving."