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What Icahn wants from Time Warner
Report: Financier may push media conglomerate to sell cable and print units, buy back more shares.
August 10, 2005: 7:58 AM EDT
Financier Carl Icahn reportedly intends to push Time Warner to sell off its cable and publishing units.
Financier Carl Icahn reportedly intends to push Time Warner to sell off its cable and publishing units.

NEW YORK (CNN/Money) - Financier Carl Icahn could push for Time Warner Inc. to sell its cable and publishing units in a bid to raise its share price, according to a published report Wednesday.

The Wall Street Journal, citing a person familiar with the situation, reported that Icahn, who it reported has recently added to his previously-disclosed $100 million stake in the world's largest media conglomerate, may also push for a larger share repurchase than the planned $5 billion share-buyback announced by the company Aug. 3.

Reports about Icahn taking a greater stake in Time Warner (Research) helped lift shares of the company 3 percent in Tuesday trading.

The media company includes Time Warner Cable, the nation's No. 2 cable operator behind Comcast (Research), as well as a print unit that includes a book publisher and Time Inc., the nation's leading magazine publisher.

It also includes America Online, the world's largest Internet service provider, as well as two major movie studios and a television unit that includes both cable and broadcast networks. CNN/Money is a unit of Time Warner.

Time Warner has already announced plans to issue shares in its cable unit, selling a 15 percent stake to the public. But Icahn could push the company to sell the entire unit, according to the Journal.

The paper also reported that despite subscriber declines and other challenges facing AOL, Icahn probably won't push for a sale of the online unit.

But quoting a person close to Icahn, the paper reported he could push for a sale of the publishing unit. That unit could fetch more than $13 billion, Henry Ellenbogen, an analyst at T. Rowe Price Group Inc., told the paper.

"Publishing is probably the single most undervalued asset at Time Warner," Ellenbogen said. T. Rowe Price, which is one of Time Warner's largest shareholders with 62 million shares, supports current management plans to increase shareholder value, he added.

The Journal said that Time Warner's size would make it a challenging takeover target, despite few corporate provisions to protect against proxy fights.

Icahn's previously disclosed stake represents only 0.1 percent of shares, and he and allies among hedge funds managers would need to own about $4 billion in shares in order to hold 5 percent.

Ted Turner, a director of the company and sometimes vocal critic, holds 35.3 million shares, according to the company's proxy statement earlier this year, or more than six times Icahn's previously disclosed holdings. He is not part of Icahn's group, the paper reported.

For a look at Time Warner's second quarter earnings and share repurchase plans, click here.  Top of page

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