AOL, AT&T Reportedly Working to End Venture

AOL Time Warner Inc. and AT&T; Corp. have temporarily suspended registering shares of their entertainment venture for a possible sale to the public while they consider alternative ways to unwind the partnership, the Wall Street Journal reported, citing people familiar with the matter.

AT&T; wants to sell all or part of its 27.6% stake in Time Warner Entertainment to help raise money and trim debt. AOL Time Warner Chief Executive Richard Parsons has said he wants to disband the venture to help simplify the financial structure of the world’s largest media company.

Putting off the share registration gives the companies time to negotiate a restructuring of the joint venture that probably will result in an initial public offering of AOL’s cable-television systems, the Journal said.

The companies last month hired Bank of America Corp. to appraise the venture, created in 1993. Analysts have estimated that the AT&T; stake may be worth as much as $10 billion to $11 billion.

AOL spokeswoman Tricia Primrose said discussions with AT&T; are continuing and declined to elaborate. AT&T; spokeswoman Sue Fleming declined to comment on the report. Time Warner Entertainment owns most of AOL Time Warner’s cable-TV systems, the Warner Bros. movie studio and the HBO pay-TV network.

New York-based AOL Time Warner has management control of the partnership. AT&T; started the process of dissolving the venture in February 2001, when it took steps to register Time Warner Entertainment shares for sale to the public because it wasn’t satisfied with AOL Time Warner’s offer to buy the stake.

Parsons has said an initial public offering of AT&T;’s stake would be a “sub-optimal” outcome. Selling shares in the venture isn’t an attractive option now because of an unfavorable market for IPOs and cable systems, investors have said.

On the New York Stock Exchange, AOL Time Warner rose 68 cents to $11.58, while AT&T; rose 60 cents to $9.74.