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Article: Merger coverage provides a lesson. (Commentary).(Time Warner's decision to trade its shares for those of AOL could be a tragic miscalculation)(Column)
- Article from:
- Los Angeles Business Journal
- Article date:
- January 27, 2003
- Author:
CopyrightCOPYRIGHT 2003 CBJ, L.P. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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CONSIDER the following item:
Jan. 13, 2000 -- Amid the hoopla over the AOL Time Warner megamerger that is being almost universally hailed as a turning point in the history of communications, some important facts are being overlooked.
AOL is an over-hyped company in an over-hyped business. Its value is comprised mostly of hot air Time Warner may seem unexciting by comparison but it has real assets that will generate most of the merged company's cash flow. Time Warner's decision to trade its shares for those of AOL, even at a 70 percent premium, will prove to be a tragic miscalculation.
The combined company gets bogged down in clashes of ...