Time Warner’s Carl Icahn problem is resolved, but it might have a new dilemma on its hands in the form of John Malone.
Malone, the cable and media mogul who controls Liberty Media, said yesterday he aims to convert his 4-percent stake in Time Warner into voting shares earlier than anticipated – a move that could signal a new round of shareholder activism at the world’s largest media company.
“Liberty aims to convert its Time Warner stake to voting shares early to enable us to participate actively in key shareholder votes and actions,” said Liberty’s CEO-elect Greg Maffei. “We are pleased with the steps Time Warner has recently taken to enhance shareholder value, including the acceleration of its share-repurchase program.”
Time Warner declined comment.
Last week Icahn, who along with his partners bought up stock in Time Warner and sought to revamp Time Warner’s board, reached a ceasefire with the media giant.
Under the terms of the deal, Icahn agreed to abandon his proxy fight in exchange for Time Warner upping its share-buyback plan from $12.5 billion to $20 billion and agreeing to slash costs by almost $1 billion. Time Warner will also appoint two new independent directors.
Liberty is currently barred until February 2007 by the Federal Trade Commission from converting its Time Warner stock to voting shares.
Liberty filed with the FTC to overturn the order, arguing that it no longer owns an interest in U.S. cable systems.
A source suggested that Malone’s Time Warner plans are simply a ploy to gain leverage in negotiations over the cable network Court TV, which Liberty co-owns with Time Warner.
Beginning this year, either Time Warner or Liberty can buy the other out and take sole ownership of Court TV.