Speaking at an investment conference hosted by the bank UBS, Marcus
said his job as CEO will be to do what is best for shareholders. He
said he would be open to selling the company only if a deal benefits
"Whether or not Time Warner Cable will participate in M&A is and
always has been, whether as a buyer or seller, 100 percent driven by
what's in the best interest of our shareholders," Rutledge said.
Time Warner Cable is the subject of takeover speculation and is
being circled by suitors such as Charter Communications Inc, Comcast
Corp and privately held Cox.
Charter's CEO Tom Rutledge said later at the UBS conference that
Charter does not have to do an acquisition to grow, but there are
major opportunities Charter can pursue once it reaches a larger
scale. Charter has been speculated to become an industry
consolidator since cable billionaire John Malone took a 27 percent
stake in the company in the spring.
If Charter was able to become larger through an acquisition, Charter
would save on programming costs, could create a national advertising
product, and expand its telecom services, Rutledge said. It might
also develop Internet video streaming products, known as
"over-the-top" services, he added.
Rutledge did not comment directly on merger speculation regarding
Time Warner Cable but did acknowledge that low interest rates create
the best situation he's "ever seen" to borrow large sums of money.
Charter has a market value of about $13 billion, much less than Time
Warner Cable's $37 billion, and would need to raise a large amount
of debt to finance a deal.
Rutledge said his favorite acquisition targets are the ones that he
can turn around, such the cable company Bresnan, which his company
bought for $1.62 billion from Cablevision earlier this year.
"The bigger opportunity in most M&A that I'm interested in is the
opportunity to operate and to unleash the full power of these
networks, by unburdening them of analog signals, and standing up
products that work the marketplace and growing the business,"
Charter is converting its analog video signals to digital which
frees up bandwidth to provide other services such as broadband
Internet. Time Warner Cable's networks are not all digital yet,
while Comcast has made the full transition to digital.
[to top of second column]
While Time Warner Cable's Marcus refrained from discussing the
takeover speculation at length at the conference, he did say in a
question-and-answer session there would be general benefits to
consolidation in cable, such as eliminating overhead and reducing
programming and infrastructure costs.
Marcus said he is "committed to fixing" the company's residential
business, which has suffered major declines over the past few years,
while also expanding the business services unit. He forecast
business services would grow to $5 billion in revenue over the next
four to five years.
He said the recent hiring of Dinni Jain as chief operating officer
was an example of an improvement to Time Warner Cable's management
team. Jain was a top executive at Insight Communications when Time
Warner Cable acquired that company last year. He takes up his new
post on January 13.
Marcus is currently Time Warner Cable COO and president and takes
over as CEO on January 1.
Reuters reported on Friday that Comcast, the No. 1 U.S. cable
provider, has tapped JPMorgan Chase & Co for advice as it evaluates
a potential bid for Time Warner Cable, the industry No. 2.
Comcast does not plan to make a pre-emptive bid for the company but
could jump in if signs emerge that much smaller rival Charter, which
has been pursuing Time Warner Cable for months, is getting close to
a deal, sources have said.
(Reporting by Liana B. Baker; editing by
John Wallace, Ronald Grover and Bernard Orr)
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