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Time Warner Cable open to merger talks with Charter - sources
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[April 28, 2015] By
Liana B. Baker
(Reuters) - Time Warner Cable Inc is open
to merger discussions with Charter Communications Inc following a
failed $45 billion bid by Comcast Corp, according to people familiar
with the matter.
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Friendly negotiations between the two companies would be in sharp
contrast to their acrimonious exchanges in 2013 and early 2014 that
ended with Time Warner Cable rejecting unsolicited approaches by
Charter and instead finding a white knight in Comcast.
While Charter has yet to make a formal offer, Time Warner Cable
believes its smaller peer may be willing to make a bid that is more
attractive compared with its takeover attempt two years ago, the
people said.
Time Warner Cable also views Charter's stock as a more valuable
currency than it did last year given its stock performance since
then, the people said. Charter shares are up 33 percent in the last
12 months. Time Warner Cable also is open to deals with companies
other than Charter, the people added.
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The sources asked not to be identified because the deliberations are
confidential. Time Warner Cable and Charter both declined to
comment.
Last Friday, Comcast abandoned its $45 billion offer for Time Warner
Cable after U.S. regulators raised concerns that the merger would
give Comcast an unfair advantage in the cable TV and Internet-based
services market.
Analysts expecting Charter to pursue TWC have debated whether
Charter would top its previous bid in an effort to secure a friendly
deal, or, facing no rival buyer, try to get TWC for less.
Controlled by John Malone’s Liberty Media Corp Charter had bid
$37.3 billion or about $132.50 per share for TWC last year before
being beaten by Comcast, whose all-stock deal was initially worth
$158.82 per share.
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Malone, a deal maker known as the “cable cowboy,” was asked in
November whether he would pursue TWC if the Comcast deal fell
through. "Hell yes," he replied.
Charter was also part of the complicated Comcast deal that
unraveled. It would have acquired control of subscribers divested by
the merged company. Last month Charter also agreed to acquire Bright
House Networks for $10.4 billion.
Time Warner Cable has the right of first refusal in the event of a
Bright House sale, however, and it could see such a deal as a way to
avoid being bought by Charter, analysts have said.
Earlier on Monday, the Wall Street Journal reported that Time Warner
Cable had reached out to Cox Communications about a potential
merger, a report that both companies later denied.
(Additional reporting by Malathi Nayak in New York; Editing by Peter
Henderosn and Ken Wills)
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