Feb. 15 (Bloomberg) -- Billionaire Carl Icahn, taking advantage of a rise in share price he helped cause, sold Time Warner Inc. stock worth about $880 million in the fourth quarter.
Funds owned by Icahn reduced their holdings in the New York-based company to 25 million shares from about 69 million during the period, according to filings with the U.S. Securities and Exchange Commission. SAC Capital Advisors LLC, which joined Icahn's attempt to break up the company, also cut its stake.
Time Warner stock gained 25 percent last year after Icahn's campaign prompted the world's largest media company to increase its share buyback and reduce costs by $1 billion. The billionaire, who started building his stake two years ago, is raising money after setting his sights on other companies, including Lear Corp. and Motorola Inc.
``Icahn made a decent return on Time Warner and it looks like he's going after other targets,'' said David Joyce, an analyst at Miller Tabak & Co. in New York who rates the shares ``buy'' and doesn't own them. ``He's redeploying his capital.''
Shares of Time Warner, owner of the AOL Web site and CNN cable network, gained 17 cents to $21.65 as of 4 p.m. in New York Stock Exchange composite trading. The stock, which rose 25 percent last year and reached a five-year high on Jan. 18, has declined 0.6 percent so far this year.
Icahn, who turns 71 tomorrow, owned 0.6 percent of Time Warner, or about $537 million of shares, as of Dec. 31.
Federated, Cigna
Icahn also boosted his stake in Federated Department Stores Inc., based in Cincinnati, to at least 1.3 percent in the quarter ending Dec. 31. His Icahn Management LP fund bought 4.2 million shares in Austin, Texas Temple-Inland Inc. and 4.8 million in Calgary-based Talisman Energy Inc.
The investor cut his stake in New York-based game maker Take-Two Interactive Software Inc. and in the health insurer Cigna Corp.
Icahn last month said he was seeking a seat on Motorola's board to pressure the second-largest mobile-phone maker to buy back stock. He owns 1.4 percent of the Schaumburg, Illinois- based company.
Earlier this month, he offered to pay $2.31 billion for the 84 percent of automotive-seat maker Lear, based in Southfield, Michigan, that he doesn't already own.
Time Warner Campaign
The activist shareholder started buying Time Warner shares in the first quarter of 2005, when the stock averaged $18.10. Icahn and his partners, Franklin Mutual Advisers Inc., Jana Partners LP and SAC Capital Advisors LLC, raised their stake to 2.6 percent in the second quarter of 2005, at a time when the shares averaged $17.20.
``Obviously it's not the bargain it was,'' Icahn said in a Jan. 24 interview, without elaborating.
On Feb. 17, 2006, Icahn abandoned his campaign to break the company into four pieces after Chief Executive Officer Richard Parsons agreed to boost the company's share buyback to $20 billion and reduce expenses by $1 billion over two years.
Icahn in last month's interview said he was happy with Parsons' response to his demands.
``Parsons kept his word, he's been terrific,'' Icahn said.
SAC, a hedge fund that oversees $12 billion, sold 10 million Time Warner shares in the fourth quarter, reducing its stake to 0.3 percent as of Dec. 31.
