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Icahn Blasts Moves by Time Warner Management

Oct 11, 2005  •  Post A Comment

Financier Carl Icahn ratcheted up his fight with the management of media giant Time Warner Tuesday, blasting the company’s directors in a letter to shareholders that sought to rally support for his push for change at the company.

In the letter, Mr. Icahn criticized Time Warner’s purchase of America Online, noting that many of the directors who authorized the purchase of the troubled online company remain on the board today. He also charged that the company sold its music operation and its 50 percent stake in cable network Comedy Central at what he called “fire sale prices.” In addition, Mr. Icahn questioned management’s decision to spend $800 million on what he called a “lavish” corporate headquarters in New York.

Mr. Icahn said in the letter, “Bringing a new voice for shareholders to the board will serve to remind the board and management of their promises and priorities. It will also make the board aware that it is accountable to the shareholders and will send a clear message that shareholders’ patience is running out.”

Time Warner officials continue to maintain that they are committed to shareholders and have a plan in place to boost the company’s stock price.

The push for representation on the board is part of a multipronged strategy by Mr. Icahn to boost shareholder value in Time Warner. He is also pushing for the company to increase the size of its stock repurchase program to $20 billion from $5 billion, and for the company to completely spin off its cable unit, instead of the current proposal to sell 16 percent of the cable unit to the public.