AOL Time Warner's Parsons Sets Goal to Buy AT&T Venture Stake
By Kim Chipman
quote.bloomberg.com
New York, April 18 (Bloomberg) -- AOL Time Warner Inc.'s Richard Parsons, who becomes chief executive next month, said one of his top priorities will be to buy back AT&T Corp.'s 26 percent stake in the companies' media and entertainment partnership.
The purchase, perhaps through an asset swap, would be part of Parsons's plan to simplify the financial structure of the world's largest media and Internet company, whose shares have lost half their value in the past year. Investors said more clarity about AOL Time Warner's joint ventures, debt and other financial matters may help boost the stock. Parsons agrees.
``In this environment, if we were easier to understand, with less complexity, it would be a good thing for us,'' Parsons said in an interview last week at the National Association of Broadcasters convention in Las Vegas.
Investor concern about some companies' complicated financial reports has increased since energy trader Enron Corp., which had a number of affiliated partnerships with off-balance-sheet financing, filed for Chapter 11 bankruptcy protection in December. It's the largest such case in U.S. history.
AOL Time Warner shares have fallen 32 percent so far this year, partly because the company surprised investors with disclosures about additional debt at the AOL Europe venture it's buying and the possible end of a key cable-TV alliance with the Newhouse family.
AOL Time Warner, the second-largest U.S. cable operator, owns about 74 percent of Time Warner Entertainment, and AT&T holds the rest. Some analysts have estimated that AT&T's stake is worth $8 billion to $11 billion.
The venture owns most of AOL Time Warner's cable-television systems, the HBO pay-TV networks, Warner Bros. film studio and a majority stake in the WB broadcast TV network. |
