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Icahn may make tender for 10% of Time Warner: report

Tue, 08/30/2005 - 8:00pm

Copyright 2005 MarketWatch.com Inc., All Rights Reserved

CBS MarketWatch

August 30, 2005 Tuesday 5:27 AM

David B. Wilkerson, MarketWatch

From Lexis Nexis

SAN FRANCISCO (MarketWatch) -- Billionaire investor Carl Icahn, who has been pushing for change at Time Warner Inc., reportedly is weighing a possible tender offer for as much of 10% of the shares of the world's biggest media company.

The billionaire financier could team up with other investors to make the offer, Bloomberg News reported Tuesday afternoon, citing unnamed people familiar with the situation. Icahn has been pressuring Time Warner (TWX) to spin off its cable business and significantly increase its stock buyback plan.

An Icahn-led group of investors holds shares and options worth about $2.2 billion, or about 2.6% of Time Warner.

On Aug. 17, Icahn met with Time Warner Chairman Richard Parsons to discuss his plans to boost the company's lagging stock price, which has traded in a range between $16 and $19 since early 2004. Both sides said there was an open exchange of views at the meeting.

On Tuesday, the stock was the most active on the New York Stock Exchange, closing up 42 cents, or 2.4%, at $17.89 on volume of 29 million shares.

In Icahn's view, a separation of Time Warner Cable from its other businesses -- along with the "immediate" repurchase of at least $20 billion of the company's stock -- would "eliminate the discount between TWX's share price and the inherent value of its unique assets."

Early in August, Time Warner approved a $5 billion stock-buyback program.
Time Warner has also taken steps to simplify the complex nature of its cable operations, which had confused some investors.

As part of its takeover of bankrupt cable operator Adelphia, Time Warner will redeem stakes in Time Warner Cable and Time Warner Entertainment held by Comcast (CMCSK) (CMCSA).

With Time Warner owning 84% of Time Warner Cable's common stock, the cable giant will become a publicly traded entity once the deal has closed.

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