Turner Accelerates Sale of His AOL Time Warner Shares

Ted Turner, who is quitting as AOL Time Warner Inc. vice chairman, is accelerating the sale of his stock in the world’s largest media company.

Turner, the largest individual shareholder at New York-based AOL Time Warner, disclosed Friday that he sold $50 million of stock outside of a prearranged trading program he established in May. The program called for Turner to sell $5 million of AOL Time Warner stock each month.

The founder of Cable News Network sold his media business to Time Warner Inc. in 1996 for $6.2 billion in stock. When America Online Inc. acquired Time Warner in 2001, he became vice chairman of the combined company.

Two days after Turner said last month that he would resign, he sold 1.3 million shares at $11.37 to $11.82 each. He sold 450,000 shares Tuesday, possibly his prearranged allotment for the month.

Turner filed a Form 4 with the Securities and Exchange Commission on Friday disclosing the sale of 5 million shares at $10.10 to $10.50 each. The filing didn’t provide any explanation for the sales.

“If he continues at this pace, it would lead all rational people to question whether he has concerns about the business of AOL Time Warner, or if his sales reflect his own personal financial situation,” said Raymond James & Associates Inc. analyst Phil Leigh.

According to the schedule Turner had established, his next sale was due in March.

Maura Donlan, a spokeswoman for Turner Enterprises, said last month that the 1.3 million shares represented about three months of sales under the trading program. Turner had refrained from selling stock from November through most of January because the company was reviewing its financial statements and was being investigated by the SEC and the Justice Department, Donlan said.

Turner, who said he planned to step down at AOL Time Warner’s annual meeting in May, has been a critic of some members of the company’s management. He has blamed Stephen M. Case, who last month said he would resign in May as the company’s chairman, and former CEO Gerald M. Levin for the decline in AOL Time Warner’s stock price.

Shares of AOL Time Warner have fallen 77% since the merger. The company last month posted a 2002 net loss of $98.7 billion, the largest in U.S. history.

AOL Time Warner shares rose 36 cents Friday to $10.51 in New York Stock Exchange trading.

Brenda Karickhoff, an associate general counsel at AOL Time Warner, confirmed that the sales reported by Turner on Friday were outside his prearranged plan. Donlan had no immediate comment on the reason for the additional sales.

“What I’ve seen so far is not enough evidence to imply that he has a discouraging outlook on AOL,” said Leigh, who doesn’t own any shares of AOL Time Warner. “It would have to continue for three to six months for me to be concerned.”

In October 2000, new SEC rules took effect that permitted corporate insiders such as Turner to plan stock sales in advance. Under the rule, executives could sell stock throughout the year without fear of breaking insider-trading laws, as long as they had no inside information at the time the plan was established.

Turner established such a program May 6, 2002, and since that time almost all of his trading has been conducted under the prearranged plan.

The existence of this plan doesn’t bar him from selling additional shares, said Peter Romeo, a securities attorney with Hogan & Hartson.