Icahn announces agreement with Time Warner, Co to repurchase $20 billion of stock

MUMBAI: Investor Carl C. Icahn and Time Warner Inc announced that they have reached an agreement regarding specific actions the company will take to improve its capital, corporate and cost structures.

Icahn said that he will drop his bid to seek control of the company and Time Warner will do some of the things the dissident shareholder has recommended. These actions are key to achieving the Icahn Group's long-stated goal of creating value for all shareholders and have proved again that shareholder activism can be extremely effective.

The agreement calls for Icahn not to contest the company's slate of directors at its shareholders meeting in May. In return, Time Warner will increase its share repurchase program from $12.5 billion to $20 billion, matching a figure proposed in a report Icahn released last week calling for a major restructuring of the media giant.

Time Warner's actions include the following:

* Time Warner will increase its existing share repurchase program from $12.5 billion to $20 billion. The company will commit to maintaining an accelerated pace of repurchases that enables it to repurchase a total of $15 billion by year end 2006. The remaining $5 billion will be purchased during 2007
* Time Warner will implement a $1 billion company-wide cost-cutting program
* Management confirmed that a different capital and corporate structure for Time Warner Cable may be appropriate. Management committed to continue to discuss this with the Icahn Group
* Time Warner will work with the Icahn Group in reviewing the other initiatives proposed in the Lazard Report
* Time Warner will appoint two new independent members to its Board of Directors and will consult with the Icahn Group in this process

Furthermore, Time Warner has taken several other significant steps to enhance long term value. These include beginning initial strategic initiatives at AOL, the divestiture of Warner Books and the merger of the WB network with the UPN network.

As head of an investors' group that owns more than 3 percent of Time Warner, Icahn has sought to reorganize the company under new management. Mr. Icahn said,"I am pleased by the many initiatives Dick Parsons has agreed to undertake and as a result I do not intend to nominate directors this year. However, I remain committed to the tenets of the Lazard Report and hope to be able to convince Dick, in our future meetings, to accept a number of its recommendations."

Icahn's retreat is a victory for Parsons, who has maintained that Time Warner is on the right path. After the Lazard report was released, Parsons sent a letter to shareholders asserting that the company was delivering value to investors.
Time Warner said yesterday that a different capital and corporate structure may be appropriate for Time Warner Cable. It also said it would continue to review the Lazard report and consult with Icahn on its proposals.

Though his initiative came up short, Icahn has no intention of keeping his advice to himself. "I remain committed to the tenets of the Lazard report and hope to be able to convince Dick [Parsons], in our future meetings, to accept a number of its recommendations," Icahn said in his statement.

The agreement yesterday gives Icahn a face-saving departure from his high-profile battle with the company. "We are very pleased to have reached an understanding with Mr. Icahn," Time Warner's chairman and chief executive Richard D. Parsons, said in a written statement. "We appreciate his role as a significant shareholder as well as his constructive recommendations."

Latest Reads
A+E Networks | TV18 launches FYI TV18 HD

AETN18, the joint venture between A+E Networks and Network18 has planned to launch the high definition (HD) version of the contemporary lifestyle entertainment channel—FYITV18 on 18 October 2018.

Television TV Channels Specialised and Niche
Tata Communication, European Tour show how VR can transform golf

The European Tour and Tata Communications have completed the world’s first test of live 360° video in 8K Ultra High Definition – the highest resolution in digital television on 16 October 2018.

Television TV Channels Sports
Kids most benefited genre in Chrome DM week 41

MUMBAI: With a growth of 0.72 per cent as compared to last week (40), the kids genre marked the highest opportunity to see (OTS) among all categories in week 41 of Chrome Data Analytics & Media. In the kids genre, Nickelodeon gained the highest OTS with 91 per cent in All India 1 Lakh+ market....

Television TV Channels Viewership
Prepare for three months of fireworks as COLORS SUPER premieres Bigg Boss Kannada – Season 6

Television viewing has never been the same, since the introduction of reality programming kingpin

Television TV Channels Regional
Star Bharat brings Kaal Bhairav Rahasya 2 with a new mystery

India has had age old history associated with myths legends folklore and one of the biggest myth has been that of the curses.

Television TV Channels GECs
Industry Honchos Uday Kotak, Rajnish Kumar and Kalpana Morparia come together to identify the winners of IBLA 2019

CNBC-TV18’s most-awaited marquee property, The India Business Leaders Awards will be conducting a jury meet along with an informative and insightful panel discussion on Today at Trident BKC, Mumbai, 2:30 pm.

Television TV Channels News Broadcasting
News18 India Unveils Two New Shows- “Ye Desh Hai Humara” and “Akhada”

Ahead of the upcoming assembly elections in 5 states including MP & Rajasthan and general elections next year

Television TV Channels News Broadcasting
Zee Telugu Announces World Television Premiere of Allu Arjun starrer Naa Peru Surya

Filling this weekend with patriotism, action and drama, Zee Telugu is here with a world television premiere movie of a young man discovering himself while finding the right balance between serving his country and overcoming the hurdles thrown at him due to the power struggles in place.

Television TV Channels Regional
BTVI endeavors to increase financial literacy across India through Money Mantra

Business Television India (BTVI), India’s Premier English Business News Channel, introduces a multicity initiative - Money Mantra which is an effort to expand the financial awareness and literacy by bringing together, personal financial experts and mutual fund experts close to the common man and...

Television TV Channels News Broadcasting

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories