Icahn appoints Lazard in bid to break-up Time Warner
NEW YORK - Carl Icahn has hired investment bank Lazard to compile a break-up plan and choose new directors for media giant Time Warner.
Icahn, who owns a 2.5% stake in Time Warner, is leading a group of investors in a campaign against the media giant and its board after what he sees as a disappointing performance under chairman and chief executive Dick Parsons.
By hiring Lazard and chairman Bruce Wasserstein, who has a reputation on Wall Street for being a hard-nosed businessman, Icahn's campaign against Time Warner is likely to be seen more favourably by shareholders.
Wasserstein and Lazard are planning to do a strategic analysis of Time Warner's businesses to "identify constructive corporate alternatives".
This may include "streamlining its corporate structure, reconfiguration of its assets, potential sale of selected businesses, adoption of a more appropriate capital structure and commencement of a significant share repurchase," Time Warner said in a statement responding to the appointment.
Icahn believes the company would operate more efficiently if its cable division and publishing arm were spun off as separate businesses. He has also disclosed his dissatisafction with Parsons and the board.
The billionaire financier also believes Time Warner's plans to sell a stake in AOL to Microsoft, Google or Yahoo! would be detrimental to the media gaint.
Icahn has a close working relationship with Wasserstein and said in an interview he is confident of Lazard winning his campaign.
"Bruce and I have known each other for years. I don't think he'd be doing this unless he thought we were going to win," he said.
Wasserstein, who took Lazard public earlier this year and has fought high-profile cases including Kirk Kerkorian's takeover attempt of Chrysalis, said: "Time Warner has a unique set of valuable assets and our assignment is to help determine how best to realise the full value of these assets."
In a statement, Time Warner said: "Our board of directors and
management are confident that we are taking the right steps to deliver sustainable value and a highly competitive return to all of our shareholders. Our businesses are performing well, and are all leaders in their sectors."
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