In his first annual shareholder’s meeting as Time Warner Inc. CEO, Jeff Bewkes provided a bit more information about the company’s decision to split off its cable business and added that in the wake of the failed Microsoft/Yahoo deal, several parties expressed interest in Time Warner’s AOL unit.
Speaking at the CNN Center in Atlanta, Bewkes said Time Warner’s board reiterated that the cable business wasn’t being sold. But he said it became apparent this year that the companies would be better off separated.
“Earlier this year we decided that separating Time Warner Cable from the rest of Time Warner would be in the best interest of both groups of shareholders,” Bewkes said at the meeting. “We’re not selling it, we’re separating it—you’ll still own it.”
“That’s because the cable company’s strategic goals, their capital needs, the different investor bases that are attracted to cable versus movie studios and content, these are increasingly different profiles,” he added. “We’re very close to reaching an agreement on this separation with Time Warner Cable—a separate board and independent management. Once that is done, which we think will be very shortly, we will share the details with you.”
Bewkes couldn’t comment on any discussions AOL had with other parties in the wake of the Microsoft-Yahoo negotiations, but confirmed that there was at least interest.
“It was widely reported that all of the Internet companies, the main ones namely Microsoft, Yahoo and even Google, were interested in and talking to AOL as all of these different possibilities were discussed,” Bewkes said. “We cannot comment on the various discussions we are having or not having.
“It is safe to say that AOL is doing fine and prospering and growing in value on its own, but also that there is a lot of interest from those other companies in AOL,” he continued. “It is hard to predict what will happen to any of these big Internet companies as you can read in the paper today."
Time Warner chairman Richard Parsons, who hand-picked Bewkes to be his successor last year, said this annual meeting will probably be his last.
Parsons, who became chairman of Time Warner in 2003 (he was named CEO in July 2002) when the media giant was saddled with heavy debt and still reeling from the disastrous AOL merger, has been credited for turning the company around, significantly paring down debt and unwinding some onerous partnerships. He thanked the board of directors for their advice and support.
“Through the tough times, they hung in there and saw the company through its darkest hours,” Parsons said.
Parsons also thanked shareholders for sticking by him over the years.
“I think that our shareholders were very kind to me, respectful of me, thoughtful and patient with me and, like our board of directors, saw this company through its darkest hours,” Parsons said. “I would just like to give a personal note of thanks to each of you and to assure you that in Jeff’s hands and with the management team and the board you just re-elected, I have every confidence that this company will reward your patience, your kindness and your respectfulness many times over.”
