KUHN CAPITAL Tuesday, March 20, 2018
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The Great Wheel


So it begins. AOL Time Warner is reported to have sold its minority stake in Hughes Electronics for $800M and is putting its Book Group, comprised mainly of Little Brown and Warner Books, on the block.The Group's value is estimated at about $320M. The two transactions are a drop in the bucket of AOL Time Warner's total debt, $26B.

But pundits believe that by selling the Group and its Hughes shares, AOL will have signaled its intention to restore financial stability, even eventually, profitability.

At the risk of carping, we advance the opinion that if clearer thinking and rigorous execution had characterized the original arguments for combining AOL and Time Warner, and had even influenced the acquisitions taking place at Time Warner before it married AOL, we'd all be spared the spectacle of a global media empire unravelling, especially those among us with the misfortune to be long-term Time Warner shareholders

We' don't score Steve Case for this state of affairs -- he just capitalized on an irresistable AOL share price. Rather, the weight of the responsibility lies with Gerald Levine and his muddled board of directors. When will the great wheel of poorly concieved M&A transactions stop spinning?

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