Crusading hedge fund investor Carl Icahn has backed away from his plan to boot the management at
The Wall Street Journal
Citing several people familiar with Icahn's plans, the paper says the investor is now leaning toward fielding a five-member board slate. Even if it won election at this spring's shareholder meeting, that slate wouldn't be big enough to give Icahn control of Time Warner's 14-member board. Icahn previously indicated he wanted to take over Time Warner through a proxy fight and then install ex-
chief Frank Biondi at the helm.
Time Warner declined to comment, while Icahn's partners at Lazard had no comment on the report.
The move marks a major victory for Time Warner chief Dick Parsons, who was maintained throughout the battle that the company was on the right track. Parsons did meet Icahn halfway on a big stock buyback demand and has moved to take action on other fronts, by selling a stake in AOL and selling off the book business.
"Overall, he had been very ambitious in what he was trying to do given the level of his holdings," says Peter Jankovskis of Oakbrook Investments, a Time Warner shareholder, speaking of 3.5% holder Icahn. "It's not surprising that his efforts would be scaled back. It will be interesting to see whether there was any quid pro quo with Time Warner or this was something he recognized independently."
Icahn has loudly railed at Time Warner's poor stock-market performance and management's failure to seize on various opportunities, but his plan to break the company into four pieces has largely been written off as attempting to fix something that's not broken. Despite his eight-month-long campaign against the company, Icahn has failed to materially lift Time Warner's long-stagnant share price.
Asked if a settlement would help the stock, Jankovskis adds, "I don't think Icahn was adding any value to the company and continue to believe that Parsons is on the right track."
On Thursday, Time Warner shares rose 3 cents to $18.