AOL Time Warner Opts to Remain United

13 May 2002

The predicted break-up of the world’s largest media company, AOL Time Warner, is not an option. So shareholders will be told on Thursday at the group’s annual meeting in New York.

The decision to remain a single entity was reached after a three-month strategic review and refutes rumours of corporate devolution, incessant since AOL TW’s stock price plunged last year – now languishing sixty per cent below its level at the time of its June 2000 merger.

On Friday AOL TW shares hit a 52-week low of $16.96 (€18.53; £11.59) after it emerged that online auctioneer eBay is to reduce its adspend with AOL.

The review, instigated last fall by chief executive-designate Richard Parsons, will present its findings to stockholders following the formal general meeting – which will also see Parsons officially taking over from his predecessor Gerald Levin. “There is no current thinking about breaking up the company,” Parsons revealed last week.

A specially appointed strategic planning unit undertook the evaluation, its members including the chief executives and key financial managers of the group’s six principal divisions. Other than the pivotal decision not to dismember the media and entertainment colossus, the review’s other elements remain under the wraps until Thursday.

However, Parsons lifted a corner of the curtain at a recent conference: “It’s my intent over time,” he revealed, “to shape an ownership structure that is simple, clearly delineated and comprehensible.”

Data sourced from: Financial Times; additional content by WARC staff