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  "documentTitle": "Time Warner Inc. (TWX)",
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  "authorName": "Lazard",
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  "presentationDate": "2006-02-01 00:00:00",
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  "notes": "This slide serves as a historical case study on a missed M&A opportunity for Time Warner.",
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      "text": "TWX lost the deal to Comcast. It was a landmark deal for Comcast which ultimately changed the face of the industry.",
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      "text": "In the summer of 2001, Comcast made an unsolicited stock swap bid for AT&T's cable business (“AT&T Broadband”), the biggest cable network in the country. In rejecting the offer, AT&T effectively put AT&T Broadband up for sale, saying AT&T would explore “strategic and financial alternatives” for the subsidiary. In addition to the price offered, AT&T was not initially enamored of a deal with Comcast because the Roberts family's voting interest in a combined company would be disproportionate to its economic interest.",
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      "text": "For TWC, a deal with AT&T Broadband was highly coveted. If merged with TWC, the combined company would be nearly three times the size of the next largest competitor and would control one-third of the US cable business. The CEO of TWX at the time, Mr. Levin, who had long experience in the cable business, was determined to pursue the combination.",
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      "text": "With the imminent departure of Mr. Levin in December 2001, the TWX Board was not in agreement on the wisdom of doing the deal. Hold over AOL board members, not versed in the merits of the cable business, had reservations. Mr. Case, in particular, objected. Regulatory scrutiny was a possibility. In addition, there was a concern that spending billions of dollars on one deal would preclude TWX from making other potential acquisitions in the Internet space.",
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      "text": "The parties discussed a scenario in which AT&T Broadband would be spun off and merged with Time Warner Entertainment, the partnership jointly owned by TWX and AT&T that housed TWX's cable operations. The combined entity would be a separately traded public entity, not beholden to TWX or AT&T. TWX would own and vote approximately 40-45% of the combined company and would manage the operations. As part of the deal, the Warner Bros. film studio and HBO would be transferred back to TWX. In addition to making the combined entity the number one player in cable, the proposed transaction would also have resolved the long-running dispute between the parties about Time Warner Entertainment.(a)",
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      "text": "The competition for AT&T Broadband continued throughout the summer and fall of 2001, a race between three companies – TWX, Comcast and Cox – and a possible spin-off of AT&T Broadband. In December 2001, TWX submitted a formal bid for AT&T Broadband and Mr. Levin abruptly announced his resignation.",
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      "text": "TWX lost the deal to Comcast. It was a landmark deal for Comcast which ultimately changed the face of the industry. As an analyst at Merrill Lynch succinctly said, “For AOL Time Warner, in the long run had they gotten AT&T Broadband, it would have been strategic brilliance.”(b)",
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      "text": "scale (with 14.4 million managed subscribers in attractive markets) gives TWC substantial clout with programming and hardware providers. TWC has upgraded its network to the highest standards in the industry and its well-clustered subscriber base improves operating and capital efficiency which, in turn, enhances the value of each customer. TWC's commercial performance (video, broadband and VoIP penetration) is exceptional in most markets. OIBDA margins, historically, have been among the highest in the industry.",
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      "text": "TWC had the opportunity to alter the competitive landscape in the cable industry by merging with AT&T Broadband in 2001. Comcast, however, prevailed and TWC, despite a still powerful market position, now finds itself as the number two cable operator. The missed opportunity is described in the following case study on the transaction.",
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      "text": "For AOL Time Warner, in the long run had they gotten AT&T Broadband, it would have been strategic brilliance. — An analyst at Merrill Lynch",
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      "text": "(a) Martin Peers and Deborah Solomon, The Wall Street Journal, “AOL Time Warner Transition Won’t Damp Colossal Cable Ambitions --- Parsons Affirms Commitment to AT&T Broadband Bid” December 6, 2001.\n(b) Saul Howard and Steve Lohr, The New York Times, “For AOL Goals are Deferred, Not Denied” December 21, 2001.",
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      "text": "CHAPTER 2D - CABLE",
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      "text": "Exhibit 2D.8: AT&T BROADBAND",
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