AOL, Time Warner IR pros prepare for more regulatory roadblocks

NEW YORK: Aggressive IR campaigning may have helped secure shareholder support for the planned dollars 123 billion marriage between America Online and Time Warner. But with US and European government watchdogs raising red flags, there’s still plenty of work to be done.

NEW YORK: Aggressive IR campaigning may have helped secure shareholder support for the planned dollars 123 billion marriage between America Online and Time Warner. But with US and European government watchdogs raising red flags, there’s still plenty of work to be done.

NEW YORK: Aggressive IR campaigning may have helped secure

shareholder support for the planned dollars 123 billion marriage between

America Online and Time Warner. But with US and European government

watchdogs raising red flags, there’s still plenty of work to be

done.



IR teams on both sides of the ocean are gearing up for the July 27

public hearing called by the FCC shortly after the landslide shareholder

victories.





’We’re working with the regulatory agencies now in the US and overseas,’

said AOL spokesman Jim Whitney. ’We’re on track and we expect to close

in the fall.’



That work has included drafting a joint 50-page response to one of the

two inquiries made by the FCC, which must approve the transfer of

certain licenses and authorizations controlled by the two companies.



IR pros stressed that cooperation will prove the key to the high-profile

mega-merger.



’(The PR pros) need to continue to make clear that this merger does not

pose any antitrust problems or issues,’ said Investors Relations Company

EVP Tom Laughran. Laughran, like many others, believes the Federal Trade

Commission and the FCC, separately investigating the deal, will approve

the merger - but will probably impose conditions on it.



Steve Frankel, managing director of Burson-Marsteller’s

corporate/financial practice, said that AOL and Time Warner IR pros

should communicate their willingness to compromise.



’If they continue to pursue a more flexible business strategy, their

communications to regulators and opinion leaders on Capitol Hill - and

consumer groups in particular - will be much more credible,’ he

explained.



IR pros at AOL, meanwhile, continue to wrestle with the slow recovery of

the company’s stock after its fall following the January 10 merger

announcement. Many analysts have speculated that if the stock drops much

further, it could seriously affect the deal. Perhaps as a result, AOL

aggressively courted majority shareholders as well as smaller

investors.



Prior to the vote, AOL operators at a New Jersey command post phoned

over 100,000 stockholders. The company also sent its three million

shareholders a glossy brochure with its yellow running-man logo

high-fiving Bugs Bunny.



Internally, all employees holding significant stock options received

upbeat e-mails thanking them in advance for their support.



Heading the IR push was AOL VP of IR Richard Hanlon, who has already

been tapped as SVP of IR for the soon-to-be-merged company.



With 35% of Time Warner shares in public hands, it was not surprising

that the company’s IR pros were relatively low-key in the days leading

up to the shareholder showdown. The company’s IR minions quietly called

up larger investors, but didn’t chase after its public shareholders like

AOL did. Of course, unlike AOL, Time Warner’s shares are worth

significantly more today than they were before the merger

announcement.



At press time, AOL was down from dollars 73.75 per share before the

announcement to just over dollars 52. Time Warner is trading at around

dollars 75, up from the dollars 64.75 it traded at before the merger was

proposed.



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