Time Warner CEO gives Icahn some credit

NEW YORK (Reuters) - Time Warner (TWX.N: Quote, Profile, Research, Stock Buzz) Chief Executive Dick Parsons on Tuesday credited activist investor Carl Icahn for expediting existing strategic plans for the media conglomerate, which drove up its share price this year.

But Parsons, speaking at the Reuters Media Summit in New York, said Icahn never won much shareholder support for a sweeping corporate overhaul he advocated in the last year.

"There was a noisy conflict but at the end of the day, I'm not sure that Carl had his arms around more than 3 to 4 percent of the votes," said Parsons. "He ultimately sued for peace."

Late last year, the billionaire investor and three other funds bought about 2.8 percent of Time Warner stock and demanded the company undertake a $20 billion share buyback and total spin-off of its Time Warner Cable division, among other proposals.

The investors complained that Time Warner's stock price had been range-bound mostly between $16 and $18 a share for years and said the company should take steps to boost shareholder value. Icahn lashed out at Parsons' management and called Time Warner bloated and bureaucratic.

Time Warner in turn disparaged Icahn as a short-term speculator, but ultimately agreed to quadruple a $5 billion share buyback plan to $20 billion. But Parsons ruled out a corporate break-up as Icahn demanded and stuck to a minority spinoff of the cable division.

Now Time Warner shares are trading over $20 a share, giving Icahn what he said were gains of $210 million in his hedge fund. The company's stock was at $20.21, up 1 cent, on Tuesday on the New York Stock Exchange.

"It would be wrong for me to say he didn't have some impact," Parsons said of Icahn. Not only did the company agree to broadly increase its buyback plan, but it also reached out to major shareholders to get their views in response to Icahn's high-profile campaign.

"When someone accumulates even 3 or 4 percent of your stock and starts making the kind of noises Carl was making, it causes you to get in touch with your other shareholders," said Parsons. "There was a sense that you could use more of your capacity to buy back the stock."  Continued...