Ted Turner, the vice chairman and largest individual shareholderof AOL Time Warner, said on Monday that he had sold about 60 millionshares, more than half his holdings, for about $789 million.
People close to Turner said the sale reflected a growingdisenchantment with the company's prospects. He effectivelycapitulated to the 70 percent decline in the share price over thelast two years, giving up hope of a significant rebound any timesoon. It was unclear why he picked this moment to unload such a largestake.
People involved in the transaction said that Turner sold theshares to Goldman, Sachs, which is seeking to resell them toinstitutional investors. The news that such a large block of shareswill be hitting the market is likely to depress the price on Tuesday.
There also appeared to be a thaw in relations between Turner,whose remaining 45 million shares still make him the biggestindividual shareholder, and Stephen M. Case, who is resigning aschairman at the company's annual meeting next week because ofpressure from Turner and other major shareholders.
In a statement, Turner said he 'remains supportive of managementand has voted in line with management's recommendations on every itemscheduled for vote,' including the re-election of Case as a director.
Turner is also stepping down from his post as vice chairman, buthe confirmed Monday that he, too, will remain a director. Two peopleclose to Turner said he felt an obligation to stay on the board inpart because few of the company's other directors have spent much oftheir careers in the media business. People close to Turner say hecontinues to alternate between warm feelings for Richard D. Parsons,the company's chief executive, and frustration that in general hefeels the company is being poorly managed.
Turner also ended what had been a long, painful process ofgradually selling his shares at depressed or falling prices.
He said he was stopping a previous plan to periodically sellsmaller chunks of his stock in order to meet his many charitablecommitments. Those steady sales helped hold down the share price, andsome analysts said his decision to finish it off with one big salemight remove at least one burden from the share price.
'From an AOL shareholder perspective, it is nice to see an orderlysale process as opposed to the daily drip of a million share blocks,'said Jordan Rohan, an analyst at Soundview Technologies.
Turner transferred about 10 million shares to a charitable trustbefore they were sold. All of the shares were sold together toGoldman, Sachs for nearly $13.15 a share, a discount to Monday'sclosing price of $13.38 cents. On Monday, Goldman, Sachs was seekingto sell the shares for about $13.15 a share, people involved said.Goldman, Sachs declined to comment. The shares have recentlyrebounded from lows of about $10 a share.
Turner did not specify his plans for the cash he raised, butpeople close to him said that he did not intend to try to buy backany of his former businesses like CNN or the Atlanta Braves, which hesold to Time Warner before it merged with America Online.
Turner is likely to remain a vocal back-seat driver. Associates ofTurner say he continues to complain about AOL Time Warner's effortsto sell business to reduce its debt.
He is especially disappointed AOL has begun seeking to sell thethree Atlanta sports teams, including the Braves, which he onceowned. And he has been particularly critical of discussions to sellits winter sports teams, the Hawks and the Thrashers, separately frombaseball's Braves and the Turner South regional cable channel. Hebelieves that the teams and channel are worth more together, peopleclose to him said. AOL Time Warner is negotiating a deal to sell thewinter teams to David McDavid, the owner of a chain of cardealerships in Texas. But a person close to Turner said he has nointerest in buying back control of the teams.
Turner has plenty of other uses for his money, includingphilanthropic promises to the United Nations and other organizations,an expanding chain of Buffalo-meat restaurants, and a film company.
Over the last year, Turner has made no secret of his bitternessover AOL's acquisition of Time Warner, sometimes publicly laceratinghimself for leaving much of his own wealth tied up in one company.Turner's friends say he has been particularly furious aboutallegations of improper accounting at AOL before the merger closed,raising the possibility that it misled Time Warner's shareholdersabout its financial health.
Now AOL Time Warner faces federal investigations by the Securitiesand Exchange Commission and the Justice Department into accountingmainly at the AOL division before and after the merger. It also facesthe possibility of expensive shareholder lawsuits contending that AOLdefrauded Time Warner shareholders. Anger over the merger and itsconsequences are expected to emerge again at the annual meeting nextweek, when some institutional shareholders may withhold their votesfrom Case over his role the architect of the deal.
