Now this is interesting.
First, Icahn warns the Time Warner board that he will hold them financially responsible if they sell for any less. This, coming when google was rumored to have pulled out of the deal.
Now that google is back in the works, Icahn is working the other side of the fence.
What value is he looking to unlock in AOL? Better take the money before Google realizes their mistake.
|Dissident shareholder Carl Icahn aims to block an alliance by Time Warner Inc.'s America Online unit and Web search leader Google Inc. saying the pact could undermine a potential merger between AOL and a Google rival, the billionaire investor said on Monday. |
Heh, is he a stakeholder in MS? Perhaps this is Ballmer's chair.
Icahn does not want TWX subjegated to the will and whims of Google. Five years is a long time to be dependant on a mother ship for the bulk of your revenue.
What happens after five years and your identity has never been firmly established and they drop you?
LookSmart was taught this by MSFT.
>> Better take the money before Google realizes their mistake.
sometimes you pay more not to have your competition get it. Imagine the press if MSFT had won this. Google's stock would have taken a huge drop and maybe started a downward trend. Instead, now their stock is way up, and they'll give AOL $1 Billion in stock, which they can sell the next day or so. Just as good as cash.
|King of all Sales|
Icahn owns 2 or 3% of Time Warner and sits on the board.
Icahn is about to run the entire Time-Warner board out of their chairs in what will be the biggest proxy fight in TW's history. I think the TW board wants the billion from google to fatten their coffers because they use company money to protect their positions.
Icahn understands this and knows it will make his job much tougher. He'd like to throw a monkey wrench into the deal to keep TW a little leaner. And make stock holders have second thoughts about the TW board. He'll probably succeed. He's only lost once. Texaco found out what Icahn wants he will get.
>> I think the TW board wants the billion from google to fatten their coffers because they use company money to protect their positions.
$1 Billion is not much to AOL-TW, at least not enough to want it that bad. Now selling ads on Google while keeping 80% of the profit, advertising their content, and still getting a $1 billion is totally different.
The 2-3% that Icahn has might not be enough, but we'll see.
It's probably a good bet that Icahn would prefer $20 billion in cash to $1 billion and 95% of AOL. The cash could come back to shareholders as a dividend (or, better even, could be used by management to buy back Icahn-owned shares at a premium to what he paid for them).
Icahn is a raider. He wants a temporarily weak TWX to further his goals.
What Icahn wants is to take over a weak TWX on the cheap, and break it up for a profit.
If anything, Icahn's resistence to the deal is a sign that it will strengthen TWX/AOL in the short term, at least, and possibly in the long term. That makes his job harder.