Time Warner to settle UC suit for $260 million

Time Warner Inc. will pay $260 million to end a securities fraud suit led by the University of California, resolving one of the last claims over the company’s 2001 merger with America Online Inc., the university said.

Investors claimed that America Online inflated its stock price prior to its merger with New York-based Time Warner by misrepresenting sales, revenue and subscriber numbers, the university said. A spokesman for the UC board of regents said the board would vote on the accord at its March 14-15 meeting.