Carl Icahn, Time Warners dissident shareholder speaking for 3% of the group, and Bruce Wasserstein, head of Lazard seem to be concocting a plan to split Time Warner into four separate companies as well as to replace the board with a new set of media lumineries. Their plan still needs to be finalized though.
Carl Icahn has already called for them to spin off 100% of their cable division. But, the suggested break-up at Time Warner would go further, leading to four companies: Time Warner Cable; the AOL internet business; the Time Inc publishing business; and the content business consisting of the Warner Brothers studios and cable channels such as HBO and CNN.
At the very least this will now pit the much respected Parsons, Chairman and CEO of Time Warner, against Icahn. Parsons believes that Time Warner is better off as one, integrated media conglomerate. Icahn clearly disagrees. I can see how Icahn's plan could potentially unclock short term shareholder value, but I struggle a little with the longer term strategic benefits, particularly in the new, more intergrated digital age.
Looks like Time Warner's in for one hell of a fight though. I wonder what will happen to AOL in the short term? There supposed to be negotiating a deal with Microsoft or Google. That seems to have gone strangely quiet. Mind you, I'm sure we'll see Parsons come out fighting soon.
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