Time Warner to Split Shares 2 for 1; Debt Rating Boosted
Time Warner Inc., the world’s largest entertainment company, said it will split its shares 2 for 1 on Dec. 15.
The combination of the announcement and good news on the company’s debt rating drove Time Warner shares to a record $106, up $7.13 on the New York Stock Exchange.
The move comes as Time Warner has generated strong cash flow growth as Chairman Gerald Levin cut costs, trimmed debt and added operations, including businesses such as Cable News Network and TBS that it acquired two years ago with Turner Broadcasting System Inc. Standard & Poor’s Corp. on Wednesday raised the company’s debt rating a notch to BBB.
The stock split “is indicative of the robust progress we’ve made in strengthening our balance sheet and creating significant value for our shareholders,” Levin said in a statement.
Time Warner’s cable systems and its Warner Bros. television division have been driving much of the company’s growth. And the company’s music business, which had been a drag on Time Warner in the past, saw improved cash flow in the third quarter.
Time Warner stock has gained 38% since the company bought Turner Broadcasting System in October 1996.
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