By Michael Flaherty
NEW YORK (Reuters) - Private equity firms are knocking on the doors of Time Warner Inc. (TWX.N: Quote, Profile, Research) and IAC/InterActive (IACI.O: Quote, Profile, Research), making their case for various deals with the two conglomerates.
The firms' pursuit of these companies underscores private equity's growing willingness to tackle large and complicated media and technology businesses -- an area they previously tried to avoid.
"Probably every private equity firm has approached us about every conceivable" idea, said Time Warner CEO Richard Parsons, speaking at the Reuters Media Summit in New York on Tuesday. "There is more money out here chasing deals, so these guys are out trying to champion or put together anything that you could conceive of. So we've heard every idea that's out there. But our focus is on executing on our strategy."
Approaching Time Warner, a media and Internet company with a market capitalization of $81.78 billion, goes counter to private equity's historic practice of seeking deals with undervalued, easy-to-understand businesses. The largest ever private equity buyout is the roughly $33 billion purchase of RJR Nabisco.
But buyout firms, which buy and sell companies, are set to raise a record $300 billion this year, analysts say. The firms and their bankers are looking to put the money to work quickly.
Parsons said that his job is to maximize the company's value for shareholders, and that no private equity deal was under way.
"In theory, if someone came and offered you an amount of money that you felt was greater than you could achieve managing the company as it's currently managed or in some other construction, you'd have to look at that and evaluate that," Parsons said, speaking hypothetically of offers for the whole company or larger parts. "But no one has so far."
And while private equity executives extol the benefits of private corporate ownership, Parsons said he saw benefits and concerns with their aggressive deal pursuits. Continued...
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