Time Warner to get €5.8bn windfall in cable spin-off

Time Warner would formally split off its cable TV business, giving the media conglomerate a €5.8 billion (US$9.25 billion) windfall and allowing it to focus on cable network, entertainment and publishing operations.

An Associated Press report further said the separation of Time Warner Cable gets Time Warner out of the media distribution business altogether, something investors had been clamoring for.

The company announced its decision to split up last month and said that the boards of the two companies had agreed to financial terms, the report said.

Time Warner Cable is the second-largest cable provider in the country after Comcast with about 13.3 million video subscribers. It has been a public company for more than a year, but Time Warner had held on to an 84% stake.

Jeff Bewkes, Time Warner's CEO, quoted by the Associated Press report, said Time Warner Cable had grown into more of a 'full-fledged telecommunications business' with expansions into high-speed internet access and digital phone service, with different needs that 'don't fit as well' with Time Warner's traditional media businesses.