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
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
’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
’(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
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
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
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