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In 2005, Icahn began publicly pressing then-chief executive office Richard Parsons to split up the media giant. On Wednesday, Time Warner CEO Jeffrey L. Bewkes said the media giant would complete the spinoff of Time Warner Cable, a divestiture Icahn had called for three years earlier as part of his activist campaign. In 2006, Icahn reluctantly backed down from his proposed proxy contest to press for a cable spinoff and stock buyback. At the time, he had the support of a number of activists including Jana Partners, SAC Capital Advisors LLC and Franklin Mutual Advisers LLC. But they cumulatively had roughly a 3% stake in the company, not enough to move the institutional investors who backed Parsons. An overlooked fact about Icahn's efforts to break up Time Warner: He cooperated with a sovereign wealth fund in Dubai to press Time Warner to a sale. According to a Feb 16, 2006, Schedule 13D filed by Istithmar PJSC, a Dubai based sovereign fund, its subsidiary, Istithmar Media Investments, which bought a 2.39% Time Warner stake, entered into a relationship with Icahn in 2006: In connection with [Istithmar Media Investments] acquisition of the Participation Notes and possible future investments in the Common Stock, [Istithmar] have retained Icahn Institutional Services LLC, an entity wholly owned by Mr. Carl Icahn, to serve as the investment advisor to [Istithmar Media Investments] with respect to [Istithmar Media Investments] economic exposure to shares of common stock through the participation notes and possible other investments in common stock. Istithmar PJSC is a Dubai-based firm that is owned by Dubai World, also the parent company of Dubai Ports World, the Dubai-owned company that sought unsuccessfully to acquire operations at six U.S. ports. Lawmakers on Capitol Hill changed the law governing foreign acquisitions of U.S. assets after a U.S. government panel initially approved DP World's plans to acquire the six U.S. port operations. DP World backed down amid the resulting political uproar and agreed to sell its operations here to a U.S. entity. Icahn's Istithmar agreement was terminated shortly after it was formed, but it showed how in less politically charged days, a combination between an activist and a sovereign fund to press for changes at a U.S. company was not unthinkable. That kind of combination would raise the ire of lawmakers in Washington if it were to happen in today's climate. - Ron Orol See The Deal newsweekly: Breaking up is hard to do Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World. Categories Deal Video
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An activist campaign to break up Time Warner Inc. that Carl Icahn began with the help of a sovereign wealth fund seems to finally be coming to fruition with the news that the media giant will finally spin off its cable TV system. 
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