|Carl Icahn wants to pressure Time Warner to spin off its cable assets.
News services Bloomberg and Reuters, citing a person familiar with the matter, reported that Mr. Icahn, 69, and a group of investors are considering increasing their holdings from 2.6% to 10% in order to put pressure on the company to spin off its cable unit, Time Warner Cable. Mr. Icahn owns his stake in Time Warner in partnership with hedge fund investors. The overall cost of acquiring the 10% is estimated at $8 billion.
Not available for comment
An assistant in Mr. Icahn’s office said he was not immediately available for comment. Phone calls to the partners involved in the potential bid were not immediately returned. The partners include are Franklin Mutual Advisers, Jana Partners and SAC Capital Advisors, according to reports.
Icahn Associates has been agitating for change at Time Warner because of its sluggish stock performance, though other media stocks have had an equally tough year. Icahn Associates believes spinning off the cable unit could eliminate the discount between the Time Warner share price and the value of its assets, according to a press release issued Aug. 15.
Stock price rises
Time Warner’s stock began rising around 2 p.m. this afternoon and by 4:20 p.m. was trading up by 2.58% at $17.95. The company’s 52-week low is $15.82 and its high is $19.90.
A Time Warner spokeswoman said, "It is Time Warner's policy not to comment on speculation and rumor."
Mr. Icahn reportedly met with Time Warner Chairman-CEO Richard Parsons Aug. 17 to discuss a $20 billion share buyback plan and to press for the cable unit to be spun off. Time Warner Cable is the second-largest cable systems operator in the country behind Comcast Corp.