Why Time Warner Might Sell: A Board with Lots of Mega-Deal Makers

Wall Street Journal

Maureen Farrell

Jul 17, 2014

As MoneyBeat’s Ronald Barusch pointed out Thursday that if 21st Century Fox’s pursuit of Time Warner TWX +1.23% Inc. went hostile, the media company doesn’t have the best defenses.
But it may not ever come to that.
Time Warner Inc.’s board has a number of directors that know their way around transformational media transactions. Several analysts have said the make up of Time Warner’s board might make it receptive to a takeover.
“We think this is constructive for something ultimately happening at Time Warner,” writes Don Bilson, the head of event-driven research Gordon Haskett.
The 12-member board includes representatives who worked on some of the largest media and telecom deals of the past several decades, including the disastrous Time Warner-AOL merger; the deals that built Verizon VZ +0.85%; Disney 'sDIS +0.92% purchase of ABC, and Apple 'sAAPL +1.44% acquisition of Beats Electronics.
Under Chairman and Chief Executive Jeff Bewkes, the board has few of the same members from when activist investor Carl Icahn pushed for a break up of the media giant in 2006.
MoneyBeat took a look at the deals that members of Time Warner’s board have worked on:
Stephen Bollenbach, Time Warner director since the AOL AOL +1.46% merger in 2001, has been on the buy-side and sell-side of two mega-deals.
At Disney, he served as chief financial officer when the media content company gobbled up the broadcaster ABC for $19 billion in 1995. At the time, it was the second largest corporate takeover ever after the famed leveraged buyout of RJR Nabisco.
At the time of the deal’s announcement, Disney’s then-CEO Michael Eisner referred to Mr. Bollenbach’s crucial role in the deal. “Without him, I would never have the courage to take on this much debt,” Mr. Eisner said, according to WSJ reports. Disney added $10 billion in debt to its balance sheet to finance the takeover.
Following his run at Disney, Mr. Bollenbach served as CEO of Hilton Hotels from 1996 to 2007 when he sold the hotel chain to the Blackstone Group for $20 billion.
James Barksdale, a Time Warner director since the AOL merger, joined AOL’s board in 1999 after he sold Netscape Communications Corp. to the Internet company for $4.3 billion four years after becoming its chief executive. Mr. Barksdale saw the $100 billion disastrous AOL-Time Warner merger from inside the boardroom.
Most recently, he helped start a company called Spread Networks, where he serves as chairman. The company, prominently featured in Michael Lewis’ book on high-speed trading Flash Boys, builds new infrastructure for high-speed trading networks.
William Barr, the former U.S. attorney general and a Time Warner director since 2009, served as general counsel for GTE Corp. from 1994 to 2000. During that time, GTE became one of the largest telecom companies in the world through a series of buyouts of smaller telecom companies. In 1998, GTE merged with Bell Atlantic– a transaction valued at roughly $70 billion. The merged entity, after two year of regulatory hurdles, became Verizon.
Fred Hassan, a Time Warner director since 2009, has been at the epicenter of a number of large deals in the pharmaceutical world. He served as chairman and CEO of pharmaceutical giant Schering-Plough MRK +1.28% from 2003 to 2009 when it was sold to Merck for $41.1 billion. After leaving Schering-Plough, Mr. Hassan, now a managing partner at the private-equity firm Warburg Pincus, helped engineer the sale of Bausch & Lomb, where he served as chairman to Valeant Pharmaceuticals for $9 billion in May 2013.  He now sits on the board of Valeant, which is in the midst of an attempt to takeover Allergan Inc. with a $51 billion hostile bid.
Paul Wachter, a Time Warner director since 2010 and founder of Main Street Advisors, is best known for serving as the financial adviser to former California governor Arnold Schwarzenegger and Lebron James. He’s helped Mr. James ink various investment and partnership deals. He also served on the board of Dr. Dre’s Beats Electronics, which sold to Apple Inc. for $3 billion.
Before founding Main Street Advisors, he was an investment banker for Schroder & Co. Incorporated, Bear, Stearns & Co. and Kidder Peabody.