BloggingStocks’ Peter Cohan (presumably a Time Warner employee) dropped in on the 92nd Street Y last month to hear Lazard CEO Bruce Wasserstein rag on Time Warner. A year or two ago, when Carl Icahn was trying to force a break-up of the company (not a bad idea), Wasserstein’s Lazard wrote a door-stop of a report detailing what had to be done to fix it.
The report and Icahn drove Time Warner’s stock up temporarily, and Wasserstein announced at the Y that he took this opportunity to cash out on his own Time Warner stock. But he also bashed Time Warner for not listening more closely to him:
At a talk on September 20th at New York’s 92nd Street Y, Lazard Ltd. (NYSE: LAZ) CEO Bruce Wasserstein took a swipe at Time Warner Inc. (NYSE: TWX), BloggingStocks’ parent, for its moribund stock price. At the same time, Wasserstein patted himself on the back for taking all his chips off the table when the stock levitated above $18 following the publication of a Lazard report on Time Warner.
Lazard, which was hired by corporate raider Carl Icahn in February 2006, authored a 343 page report that argued for a breakup of Time Warner and a big stock buyback. Beyond its $5 million fee, Lazard’s reward from Icahn was a bonus based on how far above $18 Time Warner stock went. Lazard’s report estimated that Time Warner’s breakup value ranged between $23.30 and $26.57. Following the report, Time Warner stock rose — peaking at $22.73 on January 12, 2007 — before declining to its current $18.99 — about 50 cents a share above its price in February 2006.
While he claimed to like Time Warner management — he called CEO Dick Parsons “a lovely, well-liked guy” and president Jeff Bewkes, “a highly regarded management kind of guy” — Wasserstein blamed Time Warner’s moribund stock price on their decision not to follow the recommendations in his report. Wasserstein thought Time Warner took one of his ideas — a $20 billion stock buyback (Time Warner bought back $12 billion) — but ignored his other suggestions — to do more spin-offs and to run AOL more effectively… (Continue reading)