Icahn Increases Pressure on Time Warner

13 September 2005

Interventionist shareholder Carl Icahn has announced he will seek to shoehorn new directors on to the board of US media giant Time Warner in a bid to make it bend to his will.

Icahn and his hedge fund associates want the company to spin-off its entire cable television division and to buy back $20 billion (€16.27bn; £10.96bn) in shares, believing such a move would lift sagging stock value. TW's management is determined to pursue its own less radical strategy of a 16% cable spin-off and a $5bn share buyback.

The financier's group has acquired a 2.6% stake in TW and claims the media firm's share values have fallen by around 6% since chairman Richard Parsons took over in May 2002

In a filing to the US Securities and Exchange Commission Icahn says he and his partners intend to nominate one or more directors at TW's next annual meeting in spring 2006.

They believe the company's management has "done a commendable job managing each of their various businesses" but that it has not moved quickly enough to improve shareholder value.

A statement from TW says it is reviewing several options for increasing the value of the company, including Icahn's proposals: "Investors should rest assured that this evaluation is being done in a prudent and deliberate manner, with an eye towards creating sustainable value for all of our shareholders."

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