AOL Time Warner Reportedly Mulls Cable IPO

The deal would be a mechanism to compensate AT&T for its stake in the systems' owner.

Author:: TSC Staff
Publish date:: Apr 26, 2002 7:43 AM EDT

AOL Time Warner

(AOL)

is reportedly considering selling part of its cable television operation to the public in an effort to resolve a valuation dispute with the business' 25% partner,

AT&T

(T) - Get Report

Executives at the firm are mulling the sale of a minority interest Time Warner Cable in an IPO that would value the entire unit at $45 billion,

The Wall Street Journal

reported. The deal would allow AOL to compensate AT&T for its stake in the operation without actually paying it anything, and would also give it currency for future cable acquisitions in the form of the split-out company's stock.

AOL, which has seen its cash position squeezed by its obligation to pay

Bertelsmann

$6.75 billion for its stake in AOL Europe, is loath to face another cash payout to AT&T for its stake in the partnership that owns Time Warner Cable -- a payment that could be as much as $10 billion, the newspaper reported.

The

Journal

noted an initial offering is only one of several restructuring options being considered and is not imminent.