Looks like we might finally see some upward movement in TWX share price today, this week and next month. What is now a $15 stock could easily be in the 20's during the next few weeks. Just to many changes in this company coming, to not push the stock higher.
Specifically, they expect a 3-step transaction: 1) TWX sells NY Group for a larger public stake in TWC, 2) TWC to pay a 1-time special dividend of about $6 per share, 3) TWX to distribute its stake in TWC to existing TWX equity holders.
Firm sees two potential benefits of the proposed transaction for TWX:1) Split from TWC will highlight the “core” TWX valuation at just 10.3x ’08 EPS; 2) Special dividend should generate $1.35 per TWX share in cash, or 9% of current TWX value and 17% of the “core” equity value.
They do not expect TWX to use dividend proceeds to repurchase shares.
Citigroup expects Time Warner and Time Warner Cable to make a joint announcement regarding Time Warner’s majority stake in the cable company some time over the next few months: "Indeed, such an announcement could occur as soon as Wednesday, when both companies report Q108 earnings."