BEWKES: TIME WARNER CABLE SPLIT "LIKELY"
[SOURCE: Multichannel News, AUTHOR: Mike Farrell]
Time Warner CEO Jeff Bewkes hinted that the media giant is leaning toward a separation of its Time Warner Cable business, adding that while the company is pleased with its performance and growth prospects, its structure may not fit in with the overall company. At the Bear Stearns Media conference in Palm Beach, Fla., Tuesday, Bewkes said that although Time Warner believes cable is a good business with growing cash flow potential, “we don't think that it is in its optimal capital structure. It can't necessarily leverage itself and create the optimal balance sheet, given the structure and sharing [debt] ratings. Secondly, it [the TWC stock] doesn't have enough float at 15% or 16%.” Bewkes added that by reducing its interest in the cable unit, Time Warner Cable will have more flexibility both operationally and financially. He added that the company is evaluating whether the benefits of splitting the asset would outweigh the costs of a split.
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