CEO Bewkes needs to show Time Warner better alone than with Murdoch

Fri Oct 10, 2014 11:54am EDT
 
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By Jennifer Saba

NEW YORK (Reuters) - Ten years ago, Walt Disney Co, having fended off a hostile bid from Comcast, had to make a case why it was better off as an independent company.

It succeeded. Disney's shares have soared more than 250 percent since.

Now, Time Warner Inc Chief Executive Jeff Bewkes faces a similar moment of reckoning after rejecting a bid for $85 a share from Rupert Murdoch's Twenty-First Century Fox.

Bewkes and other top brass will be under pressure at a meeting with analysts and investors next Wednesday to show they can repeat Disney's magic.

"Disney pleaded the case to get its share price up on their own," said David Miller, an analyst with Topeka Capital Markets.

"We think that Mr. Bewkes will attempt to drive home the same concept," he said, adding it remained to be seen if Bewkes would manage to replicate Disney's sterling stock performance.

Time Warner is trading at around $73 - more than twice its price since Bewkes took over as CEO in 2008, but still below Murdoch's original $85 bid. Fox had considered boosting the offer to as high as $95 a share, people familiar with the matter said.

Rejection has had its price. Time Warner shares have dropped 15 percent since Aug. 5, when Fox walked away from its offer. Fox shares are up 5.7 percent over the same period.   Continued...

 
Jeff Bewkes, CEO of Time Warner Inc., attends the Allen & Co Media Conference in Sun Valley, Idaho July 10, 2012.  Reuters/Jim Urquhart