Icahn Issues Open Letter to Time Warner's Board of Directors

    NEW YORK, Dec. 19 /PRNewswire/ -- Carl Icahn today announced that he has
 written an open letter to the board of directors of Time Warner Inc.
 (NYSE:   TWX). The text of the letter appears below.
 
     To the Board of Directors of Time Warner:
     Like all shareholders, I am not opposed to Time Warner entering into an
 AOL transaction that creates long-term value. However, I am deeply concerned
 that the Time Warner Board may be on the verge of making a disastrous decision
 concerning an agreement with Google if this agreement would make it more
 difficult in any way or effectively preclude a merger or other type of
 transaction with companies such as IAC/InterActive, eBay, Yahoo!, or Microsoft
 etc. etc... I believe there are and will be major opportunities to enhance
 Time Warner's value in future combinations. However these transactions might
 not be achievable if Time Warner enters into long-term arrangements that
 preclude future flexibility such as an agreement regarding search
 functionality. I also question whether Google is the best partner for
 unlocking the value of the AOL asset.  Indeed, a recent Goldman Sachs report
 concludes, "In contrast to the conventional perspective, we believe that eBay,
 followed by InterActive Corp, would provide greater incremental benefits to
 AOL's option value with fewer conflicts of interest than Yahoo! while MSN and
 Google would provide the least incremental benefits."
     On the eve of a proxy contest, I believe it would be a blatant breach of
 fiduciary duty to enter into an agreement with Google that would either
 foreclose the possibility of entering into a transaction that would be more
 beneficial for Time Warner shareholders or make such a transaction more
 difficult to achieve.  If, as is my belief other suitors interested in
 transactions predicated on receipt of control of AOL have been foreclosed from
 entering into negotiations, the Board's actions would be even more
 questionable. The real risk for Time Warner shareholders is that a Google
 joint venture may be short sighted in nature and may preclude any
 consideration of a broader set of alternatives that would better maximize
 value and ensure a bright future for AOL.
     Once again, I am not opposed to the Board using its business judgment to
 enter into a transaction with Google or another suitor so long as the
 transaction does not destroy or impede Time Warner's flexibility to unlock
 shareholder value in the near and long term. However, I want this letter to
 serve as notice to Time Warner's directors that if they enter into a
 transaction that has that effect, shareholders will seek to hold directors
 responsible.
 
     SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER
 DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY ICAHN PARTNERS LP, ICAHN
 PARTNERS MASTER FUND LP, AMERICAN REAL ESTATE PARTNERS, L.P., FRANKLIN MUTUAL
 ADVISERS, LLC, JANA PARTNERS LLC, JANA MASTER FUND, LTD., S.A.C. CAPITAL
 ADVISORS, LLC, S.A.C. CAPITAL ASSOCIATES, LLC, AND CERTAIN OF THEIR RESPECTIVE
 AFFILIATES FROM THE STOCKHOLDERS OF TIME WARNER INC. FOR USE AT ITS ANNUAL
 MEETING WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
 INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY
 SOLICITATION. WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY
 WILL BE MAILED TO STOCKHOLDERS OF TIME WARNER INC. AND WILL BE AVAILABLE AT NO
 CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT
 HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY
 SOLICITATION IS CONTAINED IN EXHIBIT 1 TO THE SCHEDULE 14A FILED WITH THE
 SECURITIES AND EXCHANGE COMMISSION BY ICAHN PARTNERS LP ON DECEMBER 19, 2005.
 INFORMATION INDICATED HEREIN AS HAVING BEEN OBTAINED FROM THIRD PARTIES IS
 USED WITHOUT ANY EXPRESS CONSENT OF SUCH THIRD PARTIES AND SHOULD NOT BE
 VIEWED AS INDICATING THE SUPPORT OF SUCH PERSONS FOR THE VIEWS EXPRESSED
 HEREIN.
 
 

SOURCE Carl Icahn

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