TIME Warner is undervalued by at least $40 billion (£23 billion) and should be split into four parts, according to a 350-page analysis of the media and entertainment giant unveiled last night by Lazard, the Wall Street investment bank.
Bruce Wasserstein, the head of Lazard, revealed the conclusion of his three-month study of Time Warner carried out on behalf of Carl Icahn, the New York investor who is leading a campaign to break up the media group and oust Richard Parsons, its chief executive.
The analysis recommended splitting the company into Time Warner, the TV network and film content; AOL, the internet business; Time, the publishing unit; and Time Warner Cable, the US cable TV business.
The report also recommended increasing Time Warner’s share-buyback programme to $20 billion, from the current $12.5 billion. In addition, it strongly criticises Mr Parsons for what it claims is excessive overspending by the company.
Frank Biondi, the former Viacom boss, has agreed to stand as chief executive of Time Warner if Mr Icahn’s plan is adopted. He said the break-up would take between nine and 18 months to implement.
Advertisement
Mr Icahn indicated that a complete list of replacement board directors would be announced by his dissident group within the next week.