Published January 13, 2015
Dissident shareholder Carl Icahn aims to block an alliance by Time Warner Inc.'s (TWX) America Online unit and Web search leader Google Inc. (GOOG), saying the pact could undermine a potential merger between AOL and a Google rival, the billionaire investor said Monday.
In a letter to Time Warner's board of directors, Icahn said that the company appeared to be on the verge of a "disastrous decision" following reports it is in talks to sell a 5 percent stake of its AOL Internet unit to Google Inc.
Icahn, whose group has a 3.1 percent stake in Time Warner, said he was concerned a Google pact may preclude a merger or other type of deal with the likes of eBay Inc. (EBAY), Yahoo Inc. (YHOO), IAC/InterActiveCorp (IACI), or Microsoft Corp. (MSFT).
"Like all shareholders, I am not opposed to Time Warner entering into an AOL transaction that creates long-term value," Icahn wrote. "However, I am deeply concerned that the Time Warner Board may be on the verge of making a disastrous decision concerning an agreement with Google," he said.
The opposition by Icahn to a stepped-up Web search and advertising alliance between AOL-Google slowed a renewed surge in the price of Google shares Monday, which hit a new intraday record high of $446.21.
The stock, which had been trading up 3.7 percent on the day slid back to a levels around $442, up 2.75 percent. Meanwhile, Time Warner shares gained 13 cents, or 0.7 percent to $18.13.
Icahn, who has said he is waging an "all-out proxy battle" to force Time Warner to step up asset sales and streamlining, cited a recent report by Goldman Sachs that argued that Google may not be the best long-term partner for America Online.