Carl Icahn is back at Time Warner’s gate.
The famed corporate raider, who earlier this year very publicly pushed for a breakup of the world’s largest media company before backing off, boosted his stake in the company in the second quarter by more than 8 percent.
Icahn’s buying spree – combined with Time Warner’s dormant stock price – is sure to fan the flames of speculation that he once again will raise public hackles about the company’s performance.
The specter of a return by Icahn adds even more pressure to Time Warner chief Dick Parsons to find something – anything – to move the company’s share price upward.
In the quarter that ended in June, Icahn himself and his various business entities purchased 4.83 million shares of Time Warner stock, according to a filing yesterday with the Securities and Exchange Commission. All told, he had 62 million shares at the end of June, or roughly 1.5 percent of the company – a stake valued at close to $1 billion.
Meanwhile, Jana Partners, a hedge fund that joined Icahn in his push to break up Time Warner, said yesterday it recently sold Time Warner stock.
The company disclosed that it shed 5.6 million shares in the second quarter, and now holds 24.4 million shares, according to an SEC filing.
Icahn was unavailable for comment yesterday, but a number of people close to Time Warner believe that if the company’s share price continues to languish, Icahn could resurface as a vocal critic of management.
Time Warner shares are now below levels they were trading at last August, when Icahn went public with his plans. The stock has failed to move, despite a settlement with Icahn that included a $20 billion stock buyback and an agreement to cut annual expenses by $1 billion by 2007.
Meanwhile, investment bank Lazard, which teamed up to advise Icahn, is still waiting to collect beyond its initial $5 million fee. Under the terms of their deal, Lazard gets a so-called “success fee” – $5 million for every $1 that Time Warner stock rises above $18.
Time Warner stock closed yesterday unchanged at $16.05, down almost 9 percent since the deal with Icahn was announced in February. The stock was near $18 per share when Icahn’s plans were first made public last August.
While Icahn’s cage-ratting did little to goose the share price, it did make for good corporate theater.
At a glitzy presentation at a Midtown hotel last February, Icahn, flanked by Lazard chief Bruce Wasserstein and Frank Biondi – Icahn’s pick to run Time Warner – the corporate raider slammed Parsons, saying “He’s not a media guy.”
The presentation coincided with Lazard publishing a 350-page tome proposing that Time Warner be split in to four companies: America Online, Time Warner Cable, Time Inc. and a unit containing the Warner Bros. movie studio and cable networks such as HBO and CNN.
—
Raider rerun
Carl Icahn’s purchase of more Time Warner stock – putting his stake at close to $1 billion – is fueling talk the corporate raider may resume his bid to seek changes at the media giant.
His current stake: 62M shares; $995.1M
Time Warner – Close $16.05 (unchanged)