Interventionist shareholder Carl Icahn and the Time Warner board struck a deal Friday that will free the former from the relentless pressure applied by the Icahn machine and further enrich the latter by many millions of dollars.

Both sides settled for less in private than they had demanded in public, enabling each to claim a non-Pyrrhic victory.

TW conceded Icahn's demand for a $20 billion (€16.8bn; £11.5bn) stock buyback - expected to be completed before the end of 2006. It will also impose a $1bn cost reduction regime - which includes $500k of cuts already planned. Lastly, the media titan will appoint two new Icahn-friendly independent directors to its board.

Icahn, however, dropped one of his prime demands - the total disposal of the Time Warner Cable unit. Instead, he endorsed TW's original intention to create a "different capital and corporate structure" for the cable operation, likely unloading 16% of the unit's shares onto the market.

Both sides were in conciliatory mood.

"We are very pleased to have reached an understanding with Mr Icahn," said TW chairman/ceo Richard D Parsons. "We appreciate his role as a significant shareholder as well as his constructive suggestions."

Close-harmonized Icahn: "I believe Dick is very sincere. He wants to see the stock price go up. It's part of his legacy."

Speaking afterwards to the press, it seems Icahn needed to employ his formidable persuasive powers to convince his allies that the deal was in their interests.

After broad framework was agreed Thursday evening, Icahn hit the phone until about 2am Friday, attempting to enlist his partners' support, among them a Dubai-based fund. The final 'i's were dotted and 't's crossed during a phone conversation between Icahn and Parsons at 3.45pm Friday.

"We said, 'congratulations, great, we got a deal'," Icahn told reporters.

Data sourced from Wall Street Journal Online; additional content by WARC staff