Oof, this is definitely not a good look for Time Warner.
When AT&T settled on an agreement to purchase the behemoth media company for $85.4 billion this weekend, its board of directors had all the reason in the world to celebrate. Now, after becoming privy to some new information about its business partner, not so much: AT&Ts called off the merger due to Time Warners failure to disclose that one of its employees has diarrhea.
The telecommunication companys decision to withdraw its offer was made swiftly upon finding out that nowhere in the thousands of pages of documents profiling Time Warners revenue, personnel, and projections was it noted that Jeffrey Marks, a social media coordinator for Time Warner subsidiary HBO, has had flu-related liquid bowel movements for the past five days. Although Time Warner quickly provided a complete and extensive detailing of Marks condition, it was too little, too late: AT&T has elected to end all talks of a merger until further notice.
AT&T chief executive Randall L. Stephenson released a press statement explaining his choice to back out of the deal:
Our company expects good faith from any entity it decides to enter into business with, and by not making the fact that one of its employees has been having diarrhea abundantly clear upfront, Time Warner broke that trust, said Stephenson. Its not the diarrhea employee thats the problem, its the fact that we didnt know about him when we agreed to the sale.
Stephensons words for Time Warner executives only got harsher from there:
Its a total bait and switch, he continued. We thought we were buying a corporation that owns dozens of TV channels, movie studios, and publications and has zero employees with diarrhea. What we were sold was something much different.
Time Warner chief executive Jeffrey Bewkes held an emergency press conference to publicly apologize for not being transparent about Mr. Marks diarrhea, largely shouldering blame for the incident. Bewkes went on to assure current Time Warner business affiliates that he seeks to restore the trust that [Time Warner] jeopardized by concealing Mr. Marks diarrhea and never let another deal transpire where the other party isnt fully aware of how many of its employees were experiencing symptoms of diarrhea.
Considering how quick AT&T was to pull out of the agreement, this apology likely wont be enough to rebuild goodwill. Investors are sure to be furious with Mr. Bewkes as well now that Time Warners stock has already plummeted 15 percent and counting since the public found out that Mr. Marks has been glazing the bowl for the past few days and Time Warner chose to conceal that information from its buyer.
Clearly, someone among Time Warners ranks missed out on an ethics lesson or two in business school, because this is the kind of careless blunder that can sink an entire corporation. Disasters like this are tough to come back from, and the fact the Mr. Marks still has diarrhea is only making things worse for them. Itll be a long time before AT&T considers joining forces with Time Warner again, thats for certain.