A Grand Alliance For Time Warner?

Time Warner has moved closer to clinching the elusive strategic alliance promised by Chairman Steven Ross since Time and Warner merged in January, 1990. Japan's Toshiba and C. Itoh both said they were negotiating to buy an equity stake in Time Warner. Neither offered details or said how far the talks have progressed. Time Warner had no comment.

Japanese and U. S. sources close to the deal said the Japanese companies might each pay $500 million to buy into a new company with interests in Time Warner's cable, pay TV, and movie divisions. Investors were initially cool: "Even after this, they still have $7 billion in debt left," said one.