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Dick Parsons, chairman and chief executive of Time Warner, on Thursday ruled out accelerating the pace of the media conglomerate’s $12.5bn share repurchase programme, saying he would stick to a two-year buyback period.
Mr Parsons, speaking at a conference in New York, told investors he felt he had “hit the right balance” between demands from some investors for Time Warner to increase its debt levels and return more cash to shareholders and other, longer-term, investors who wanted Time Warner to invest.
“We have to keep an eye on both pedals,” Mr Parsons said. “We’ve arrived at a place where we are very comfortable we have hit the right balance.”
The comments come amid pressure from Carl Icahn, the activist shareholder who controls around 3 per cent of Time Warner, for a radical restructuring of Time Warner, including an immediate $20bn share buyback.
Mr Icahn and his demands were not specifically mentioned at the conference, but Mr Parsons was asked by other investors why Time Warner was not buying back its shares immediately.
Mr Parsons replied that he did not want Time Warner’s credit ratings to be downgraded by increasing debt levels too rapidly.
He also said that, although he could see the outlook for Time Warner’s publishing, cable, content and internet businesses, he “can’t see everybody’s cards”, suggesting acquisition or other investment opportunities might offer higher growth opportunities.
Mr Parsons said discussions were taking place about a deal related to Time Warner’s AOL internet portal business, which was relaunched this year as the group shifted its emphasis from a subscription business to an advertising-focused free portal.
AOL is believed to be in discussions with both Microsoft and Google about a deal. Mr Parsons emphasised that Time Warner was “not a seller” of AOL, but that he was in discussions about a deal to improve the advertising technology of the AOL.com platform and to increase the traffic to the portal.