Time Warner Inc.’s share price down, negotiates over the acquisition of a stake in Vice Media Inc. to diversify content

A person with knowledge of the matter reported that Time Warner Inc. is in talks over the acquisition of a stake in Vice Media Inc. The person, who asked not to be named because the talks are still not public, explained that at the discussions, Vice Media has been valued in a range from 2 to 3 billion dollars.

Currently, Vice Media has a news show on the HBO cable network of Time Warner Inc. In addition, the company holds some of the most popular YouTube channels, which makes it a preferred investment for Time Warner, especially considering the fact that channels on YouTube have reached a large number of customers.

People close to the process of negotiations between the two companies warned that the transaction is not final, which basically means that the talks could still fall apart. If the acquisition is finalized, it would follow a 5% stake sale to 21st Century Fox in 2013.

Time Warner Inc., which is backed by Rupert Murdoch, has explained that it has set a goal of doubling its revenue to reach 1 billion dollars by 2016. In March this year, Mr. Shane Smith, who is a co-founder of the company, explained in an interview for Bloomberg TV that Vice Media may opt for an initial public offering.

Time Warner Inc. did not disclose information about the size of the stake that is negotiated, but the transaction is considered beneficial for the company because it would provide its TV network with property of successfully developed content for a variety of new formats. Moreover, Vice Media is focused primarily on younger audiences that will also add more customers to Time Warner Inc.s subscribers.

One of the Vice Medias spokesmen – Alex Detrick refused to make any comments on the information. So did Keith Cocozza, who is a spokesman of Time Warner Inc.

Time Warner Inc. was 2.94% down to close at 68.99 dollars per share yesterday, marking a one-year change of +17.39%. According to the information published on CNN Money, the 24 analysts offering 12-month price forecasts for Time Warner Inc. have a median target of 77.00, with a high estimate of 84.00 and a low estimate of 67.00. The median estimate represents a +11.61% increase from the last price of 68.99.