Responding to renewed pressure from investors to up his company's share price, Time Warner Inc. CEO Jeff Bewkes reportedly told them that a spin-off of HBO would actually harm the company's stock price.
According to the New York Post, which has been following investor dissatisfaction with the media conglomerate closely over the last week, Bewkes met with shareholders behind closed doors this week.
He left open the possibility that Time Warner could be sold, but he resisted calls to spin off its most profitable division, HBO. Doing so, he argued, would splinter HBO from Time Warner's other large cable asset, Turner Networks -- an entirely counter-intuitive move in an age when content brands need more scale, not less.
"Splitting up can destroy value," he reportedly told investors, referencing Viacom chief Sumner Redstone's unfortunate decision a decade ago to separate his company from CBS Corp.
The Post reported last week that an activist shareholder, institutionally run by a disciple of legendary corporate rabble rouser Carl Icahn, is pushing for a sale of the top media conglomerate.
New York-based Corvex Management is pondering a move to lead a boardroom push that would force Time Warner to either sell itself, or at least spin off its most profitable division, HBO.
Corvex is run by Keith Meister, who, until 2006, served as a top Icahn aid. Icahn led an unsuccessful 2006 bid to break up Time Warner, which also operates Turner Networks.
Meanwhile, in December, the Post says a "mystery buyer" purchased $100 million shares of Time Warner call options.
Speculation turned to Icahn himself, who told CNBC that he currently doesn't own any of Time Warner's stock … yet.
For his part, Bewkes and the board turned down a takeover bid by Rupert Murdoch and 21st Century Fox in 2014. They've been under intense pressure to grow the company's stock price ever since then.
For more:
- read this New York Post story
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