Interestingly, in light of the furor caused by its contingent rights offering, Time
Warner decided to withdraw the offer a few weeks after it had been announced. In
its place, the company decided to offer current shareholders the right to purchase up
to 34.45 million new shares at a fixed price of $80 per share. The company=s
investment bankers also took a haircut on commissions, reducing their take to a total
of 3% of the amount raised and agreed to purchase for their own account any unsold
shares. Obviously, the initial contingent rights offering was a bad idea. Both large
and small investors heralded the company=s change in the offering as a victory for
shareholders.