Updated: With the Time WarnerCable separation in the past and the AOL spin on the way, Time Warner Chairman and CEO Jeff Bewkes very, very carefully laid the groundwork for possible acquisitions today during the company’s Q209 earnings call. In the months following the $9.1 billion special dividend from TWC, Time Warner (NYSE: TWX) has bought back some $350 million in stock. But Bewkes told analysts that acquisitions that bring “strategic advantages” are “another potential use” for excess buying power.
One more condition from Bewkes: “Any acquisition needs to provide an attractive risk-adjusted return, compared to other uses for our capital— including buying back our own stock.” That helps narrow down the buy list. I’ll add another criterion: avoid anything that requires massive corporate integration to be deemed a success. Been there, wearing the t-shirt.
What could be coming? But I don’t think Bewkes is talking about anything massive—and not only about full acquisitions. TW has opened the purse strings for a couple of deals recently that offer some guidance: In March, TW picked up 31 percent of Central European Media Enterprises Ltd. for $241.5 million in a strategic move giving the company a programming presence in central Europe and a partner for Warner Bros. More recently, Warner Bros. picked up bankrupt Midway Games and the Mortal Kombat franchise for $49 million to tuck into its own gaming activities.
By Staci D. Kramer