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Icahn plans to divide up Time Warner

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Dec. 3--Carl Icahn, who's declared war on Time Warner and its boss Dick Parsons, is looking to divide up the media giant into several fiefdoms -- possibly as many as four -- sources told the Daily News yesterday.

Icahn's recently hired investment bankers at Lazard have begun a "business by business" analysis of the media giant whose units include Time Warner Cable, America Online, and the Warner Bros. movie studio.

Sources said the study has just begun and it's unclear yet what the outcome will be. Icahn and Lazard declined comment.

Icahn and a group of allies who together own about 3 percent of Time Warner's shares, are pressing for some form of radical restructuring as they seek to pull Time Warner's stock out of the doldrums. It's been stuck at around $18 for years.

Lazard's compensation is tied to the stock's performance. It will not get paid unless the stock moves beyond $18.

Icahn has tapped the same team, led by Lazard chief Bruce Wasserstein, who helped Viacom chief Sumner Redstone craft a plan to split his media empire in two.

The Lazard plan would form the basis of Icahn's proxy fight for board control, according to the Financial Times.

Icahn and his bankers are reaching out to a number of prominent media execs to join a rival slate of directors. To succeed, Icahn needs more than 50 percent of Time Warner shareholders to support him.

The shareholder activist has already publicly called for the full spin-off of Time Warner Cable and for a $20 billion buyback of Time Warner stock.

Parsons, who recently boosted the buyback to $12.5 billion from $5 billion, counters that Time Warner's businesses are all leaders in their sectors and the company is taking the right steps to boost its share price.


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