Listen up

11 October 2005 By Dan Ackman

The AOL merger wasn t the media giant’s only disaster. Everything since has been a dismal failure too, the billionaire investor reckons. And he has a point. Shareholders should support Icahn’s demand for a shake up of the board.

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Carl Icahn, faulting Time Warner management for mergers it made and mergers it failed to make as well as permitting excessive costs, is pushing for multiple seats on the media giant's board. His earlier cries to spin off 100% of Time Warner's Cable business and to buy back $20bn worth of shares having essentially been ignored, Icahn is broadening his attack, saying current directors' fingerprints are all over the disastrous AOL merger and that their judgement has not improved much since.

Now Icahn is making his threat of a proxy fight more explicit, calling for an outside audit of company costs, and saying a partial spinoff of the cable company is akin to the pattern of inaction that has harmed the company even since the AOL deal.

Time Warner issued a statement saying it is listening to shareholders and refining its business model and rethinking the proper allocation of assets on an ongoing basis.

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