Media giant Time Warner Inc. (TWX, TWX.L) will disclose details of how it will separate its Cable unit on Wednesday, the Wall Street Journal reported. The split off will help Time Warner to refocus as a pure media content company, concentrating on movies, TV programming and magazines.
Time Warner holds an 84% stake in its cable division - Time Warner Cable, while 16% is held by the public. In the latest first quarter, Time Warner Cable's revenue grew 8% to $4.2 billion. The cable unit's subscription revenue for the quarter rose 8%, to $4 billion while operating income improved 10% to $636 million.
According to people familiar with the situation, Time Warner will collect $9.25 billion from a special $10-a-share dividend to be paid by the cable company, following the split-off, which is expected to be completed by year-end.
The spin off of the cable unit will allow Time Warner to reduce its debt load of $34.6 billion, which includes cable debt, by two-thirds. The debt load of Time Warner Cable, which already has net debt of $13 billion will further increase as it will have to borrow to pay the $10.9 billion dividend, the WSJ said.
The Journal said that the spin off will be effected in three ways.
-- Time Warner will increase its stake in the cable unit to 85.2% by unwinding a related holding company called New York Group.
-- Time Warner Cable will pay the dividend, effectively shifting debt onto its balance sheet.
-- Time Warner will then allocate its stake to its shareholders through a stock dividend or some other means, depending upon the market conditions, noted the WSJ.
TWX closed Tuesday's trade at $16.15. Wednesday, on the London Stock Exchange, TWX.L is currently up 1.43% trading at 830 pence a share.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.