Word: priced
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Dates: during 2000-2000
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...mess, had engineered the largest merger in American corporate history. Time Warner, the immense media conglomerate that had sprung from the loins of the magazine you are now reading--having failed to beat the Internet upstarts with its own efforts--had decided to surrender to them for the best price it could get, about $162 billion in AOL stock. The companies valued the combination at $350 billion...
...company had remained inextricably mired in its own past, a dinosaur lurching its way through a world that would soon belong to swifter creatures, almost pathetically unable--like all the major media companies--to make the Great Leap Forward into the new Internet economy. The company's stock price had plateaued in a year in which Net stocks soared, and there was little excitement about the plans being developed in its recently hatched digital division, despite projected outlays this year of $500 million. "We had a big uphill job as a corporation" to catch up with the established Internet players...
Levin reasoned that Time Warner without an Internet connection was still valuable, but its value to an Internet buyer was greater. So he arrived at 1.5 AOL shares to be exchanged for each TWX share. In real money, that was 70% more than Time Warner's $65 price the Friday before the deal was announced, but it would still give AOL shareholders 55% of the company. Conversely, Time Warner was providing 80% of the cash flow. Says Levin: "If some people think that AOL has been sold at too much of a discount or Time Warner has been sold...
...first task will probably be the hardest. In many ways, the pre-deal Time Warner was less an operating company than it was a stock price, the financial expression of a series of disconnected assets. Unlike other media megaliths like Disney or News Corp., where a nearly totemic central figure--Michael Eisner and Rupert Murdoch, respectively--conceives the strategy and orders it into place, Time Warner under Levin has been an extremely successful dysfunctional family. Six powerful executives, ranging from Roger Ames of the music group to Terry McGuirk of the Turner networks, run six huge businesses, and their rivalry...
...such problem. Ever since Case fought off the awful negative publicity surrounding the late 1996 fiasco in which customers couldn't access the overburdened servers, the company has been rocketing from one success to another. The number of AOL zillionaires has multiplied with each upward ratchet of the stock price, and the atmosphere in Dulles sometimes feels like it's ready to combust. The unnamed Time Warner executive who told the New York Times that merging the cultures would be easy because the AOL people are laid-back "latte drinkers" would do well to re-examine what's in those...