With less than two months under his belt as CEO of Time Warner Inc., Jeff Bewkes lived up to expectations that he would try to shake up the media giant, announcing Wednesday that Time Warner is initiating direct talks with Time Warner Cable management and its board of directors to determine how and when it could reduce its ownership in the cable company.
Time Warner spun out TWC in March 2007, retaining an 84% stake in the cable company. Speculation has been rampant that the parent would look to reduce that stake, possibly by the end of March when negative tax implications resulting from a transaction would disappear.
“It appears that our current ownership structure is less than optimal for both companies. We are initiating direct discussions with their management and their separate board of directors regarding our ownership of Time Warner Cable.” Bewkes said on a conference call with analysts Wednesday. “A decision on whether and how to change our ownership level by our first quarter earnings report at the end of April.”
Just how that split will be done remains to be seen. Some analysts have speculated in the past that Time Warner would reduce its stake in the cable company by issuing more stock through a large acquisition.