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SAN FRANCISCO (AFX) -- Billionaire financier Carl Icahn fired another salvo in his war with Time Warner Inc., saying the company is "bloated with an unnecessary bureaucracy" and that Chairman Richard Parsons and the board of directors could make "another error" as they mull bids for a minority stake in America Online.
Quoted in excerpts from an interview that will appear in the Nov. 28 edition of BusinessWeek, Icahn told the magazine that his plan to replace some or all of the Time Warner board directors could include the ouster of Parsons. The investor first announced the plan in September.
Icahn, who with partners holds 2.5% of Time Warner shares , reiterated to BusinessWeek his demands that the company lift its share buyback to $20 billion from $5 billion and spin off its cable operations to the public. He also said that the publishing unit, including magazines such as Time, Sports Illustrated and Fortune, might need to be spun off as well.
"In breaking up Time Warner, the managers of the units would become unchained. They would be able to perform effectively and more profitably at much lower costs. Time Warner is a company that's bloated with an unnecessary bureaucracy at the very top," BusinessWeek quotes Icahn as saying.
He also scoffed at the company's plans for AOL, which Parsons has identified as the primary key to growth at Time Warner.
"He's just had an epiphany about AOL," Icahn told BusinessWeek. "Where have they been for the past three years? I am concerned that Parsons and the board will make another error concerning AOL as they have done in selling Time Warner Music too cheaply."
Warner Music Group was sold to a consortium led by mogul Edgar Bronfman last year for $2.6 billion.
Several companies, including software giant Microsoft Corp. , reportedly have expressed interest in taking a minority stake in AOL, which is being transformed into a portal-driven company as online-advertising revenues skyrocket.
Time Warner responded in a statement: "As Mr. Parsons stated on our recent [third-quarter] earnings conference call, our board of directors and management are confident that we are taking the right steps to deliver sustainable value and a highly competitive return to all of our shareholders.
"Our businesses are performing well and are all leaders in their sectors," the company added.
More broadly, Icahn told the magazine that unless shareholders insist on more stockholder-appointed board members at U.S. corporations, corporate America "will not be able to meet the needs of future generations on such issues as Social Security, private pensions and health-care plans."
Time Warner shares rose 21 cents to close at $18.03. This story was supplied by MarketWatch. For further information see
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