[April 21, 2014]
(Reuters) — Comcast Corp <CMCSA.O> is in talks with Charter
Communications <CHTR.O> over selling or spinning off roughly 3
million subscribers worth approximately $18 billion to $20 billion
as part of the divestitures related to its $45.3 billion takeover of
Time Warner Cable <TWC.N>, according to a source familiar with the
matter.
The talks center around either a straight sale of 3 million or so
subscribers, or the potential creation of a spinoff in which Charter
would buy a substantial minority stake, the source added.
There may be other options the two companies are discussing, the
source said, adding that while the negotiations with Charter are
serious, they are still in the early stages and could fall apart.
Other cable companies also are interested in Comcast's divested
subscribers, according to the source. The Financial Times first
reported the news of the talks with Charter.
A Comcast spokesman declined to comment on Saturday while
representatives for Time Warner Cable and Charter could not be
reached for comment.
Executives from Comcast and Time Warner Cable earlier this month
sought to reassure lawmakers that the merger between the two largest
U.S. cable companies would not result in higher prices for cable TV
and Internet packages.
Comcast already has pledged to divest 3 million subscribers to keep
the combined company's subscriber base just under 30 percent of the
U.S. pay television market.
The source said that the Comcast-Time Warner Cable deal has to be
approved by regulators before any divestitures occur. However,
Comcast could reach an agreement earlier with another cable company
such as Charter, whose largest investor is John Malone's Liberty
Media <LMCA.O>, that would be contingent on the merger being
approved by regulators.
The 3 million subscriber number could still change but, the source
said, it would unlikely be as large as 5 million subscribers. The
location of the subscribers in question was unknown.
The merged company would serve between 20 percent to 40 percent of
high-speed Internet customers in the United States, Comcast has said
in a Federal Communications Commission filing.
The House of Representatives Judiciary Committee is expected to hold
a hearing on the deal early next month.
(Reporting Liana B. Baker and Michael Hirtzer; editing by Gunna
Dickson)
