Time Warner Inc Chief Executive Jeffrey Bewkes said on Friday that his company is still leaning toward spinning off AOL to shareholders as the preferred method for divesting the struggling Internet unit.
Bewkes said forms of separation being considered include a split-off, spin-off or a combination.
A spin-off would see Time Warner distribute the stock it owns in AOL on a pro rata basis to its shareholders, similar to a dividend distribution.
As widely expected, Time Warner confirmed on Thursday that it would separate AOL as an independent, publicly traded company.
Bewkes told Sanford Bernstein's Strategic Decisions Conference on Friday that AOL will be setting up its own board and other requirements for a public company over the next six months in time to complete the separation.
He said it is possible that company takes on some debt once it gets spun off, depending on the planned capital structure and the assets that remain with the independent business.
“It has pretty healthy cash flow so theoretically it could support some debt if that looked advisable once the final structure is settled," said Bewkes.
Wall Street had long speculated that Time Warner would break up AOL into its advertising and content unit and its dial-up Internet access unit ahead of a separation.
AOL's dial-up Internet access, once the primary way Americans connected to the Internet, is now a shrinking business as most subscribers have dropped it for faster services from phone and cable companies.
Bewkes said forms of separation being considered include a split-off, spin-off or a combination.
A spin-off would see Time Warner distribute the stock it owns in AOL on a pro rata basis to its shareholders, similar to a dividend distribution.
As widely expected, Time Warner confirmed on Thursday that it would separate AOL as an independent, publicly traded company.
Bewkes told Sanford Bernstein's Strategic Decisions Conference on Friday that AOL will be setting up its own board and other requirements for a public company over the next six months in time to complete the separation.
He said it is possible that company takes on some debt once it gets spun off, depending on the planned capital structure and the assets that remain with the independent business.
“It has pretty healthy cash flow so theoretically it could support some debt if that looked advisable once the final structure is settled," said Bewkes.
Wall Street had long speculated that Time Warner would break up AOL into its advertising and content unit and its dial-up Internet access unit ahead of a separation.
AOL's dial-up Internet access, once the primary way Americans connected to the Internet, is now a shrinking business as most subscribers have dropped it for faster services from phone and cable companies.
