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Icahn Objects to AOL-Google Linkup

Dec 20, 2005  •  Post A Comment

Billionaire and financier Carl Icahn weighed in Monday on the possible deal between Time Warner’s America Online unit and Google, saying any transaction that would preclude AOL from merging with any suitor would be “disastrous.”

In a letter to shareholders Mr. Icahn, who for months has been waging a proxy battle with Time Warner management over the direction of the media giant, questioned whether Google would be the best partner to maximize the value of the online service and cited an analyst report from Goldman Sachs that suggested more appropriate partners for AOL might be online auction company eBay or Barry Diller’s IAC/InterActiveCorp.

Those two companies “would provide greater incremental benefits to AOL’s option value with fewer conflicts of interest than Yahoo! while MSN and Google would provide the least incremental benefits,” Mr. Icahn said in the letter.

The letter was the latest twist in what is shaping up to be a protracted fight between Time Warner management and Mr. Icahn over everything from how much of Time Warner Cable should be offered to the public to the size of the media company’s share-buyback plan.

Mr. Icahn has also been pushing hard for representation on the Time Warner board, which he has accused of shirking fiduciary responsibility on a number of fronts, including his charge that the board dismissed too quickly the notion of selling AOL.