TW chief Parsons tips hat to Icahn

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NEW YORK -- Time Warner chairman and CEO 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% of the votes," said Parsons. "He ultimately sued for peace."

Late last year, the billionaire investor and three other funds bought about 2.8% of Time Warner stock and demanded the company undertake a $20 billion share buyback and total spinoff 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.

"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% 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."

Time Warner competes with media rivals such as News Corporation (down $0.21 to $21.21, Charts), Viacom (down $0.05 to $37.68, Charts) and Disney (up $0.06 to $32.65, Charts).

Parsons said he's not worried about another assault by Icahn. "Someone asked me if he is happy. I'm not sure if that's a word I would use. I'm sure he is happier."

Icahn, for his part, said he is happy, now that Time Warner stock has risen over the past several months.

"I'm happy concerning Time Warner," said Icahn in a phone interview on Tuesday. "The hedge fund makes over $200 million and to me, that's a lot better than having a debilitating proxy fight."

"Dick kept the promises he made to me and that makes me happy," Icahn added. "He promised to cut expenses and do a huge buyback.

"We helped facilitate some of those changes. I think some of those things would not have happened to the extent that they did if we hadn't been around," said Icahn, adding that he "got some criticism for backing off" and dropping the campaign for a full breakup.
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