Ted Turner unloaded more than half his AOL Time Warner stock Monday in a sale worth $789 million but agreed to back management’s desire to keep resigning chairman Steve Case on the board of directors.
AOL TW’s largest institutional shareholder, Capital Group, is reportedly opposing the reelection of Case and two other directors who support him. Case announced last January, amid pressure from Capital Group and Turner, that he would resign as chairman at the company’s annual meeting May 16.
Observers had speculated that Turner might continue to oppose a director’s slot for Case. That speculation was put to rest by a company statement Monday that Turner — who’s set to ankle as vice chairman but remain on the corporate board — has agreed to vote with management at the upcoming annual meeting on all issues, including the retention of Case as a director.
Turner’s huge stock sale could be beneficial to the stock price in the short term. That’s because Turner previously stated his intent to unload much of his holdings — which comes to a conclusion with his Monday sale, the company said — and company insiders believe that’s held down AOL’s share price of late.
The conclusion of Turner’s sales activity effectively removes any “overhang” on the stock, and execs hope shares will begin to reflect the recently improved atmosphere for media issues.
“Now’s a pretty good time for this to be absorbed by the stock, as the market has been up lately,” Houlihan, Lokey, Howard & Zukin analyst David Davis said. “And the move was expected, so it’s already been valued into the stock.”
Turner sold about 12.8 million shares in AOL last year, according to a tracking service. In the latest move, he sold 60 million shares through Goldman, Sachs. Some 10 million of the shares were transferred to a charitable trust, which then also sold those shares.
His big sell-off notwithstanding, Turner remains AOL’s biggest individual stockholder with 55.9 million shares, or 1.294%, followed by Case with 15.4 million (0.356%). Gordie Crawford’s Capital Group holds the biggest institutional stake, recently reported as 7.5%.
Turner sold Turner Broadcasting to Time Warner in 1996 in a deal then valued at $7.34 billion. His seller’s remorse set in almost immediately and lingered through the later America Online-Time Warner merger. Turner has seen his shares lose about $7 billion in value within the past three years.
AOL shares have fallen more than 22% in the past year, reaching a 52-week low of $8.70 on July 25 following a high of $20.13 on May 17. The stock closed down 7 cents at $13.38 on Monday and dipped a bit further in after-hours activity.