Fund Firm Cuts Stake in Time Warner

Time Warner Inc.’s biggest shareholder, Capital Research & Management Co., cut its stake to 4.2%, shedding 48.3 million shares as billionaire investor Carl Icahn campaigns to split the company into four pieces.

Capital Research, a unit of Los Angeles-based Capital Group Cos., had held 190.6 million shares as of Dec. 31, the investment company said in a regulatory filing Friday.

Capital Research has cut its Time Warner stake in each of the last two years.

Icahn is trying to persuade Time Warner’s biggest holders that the company’s value can be increased by as much $45 billion by splitting it up and accelerating a $20-billion stock buyback. The shares are little changed since Aug. 10, when Icahn’s interest in Time Warner, the world’s biggest media company, was first reported.

“It’s a tacit vote of non-confidence in Carl Icahn,” said Susan Kalla, an analyst with Caris & Co., who rates Time Warner stock “neutral.”

Representatives of Time Warner, Capital Research and Icahn declined to comment.

Capital manages the American Funds family of mutual funds.

By selling Time Warner shares, Capital Research money manager Gordon Crawford, who oversees the company’s media investments, may be indicating that he’ll sit out Icahn’s battle.

Shares of Time Warner fell 3 cents to $18.32.