Charter Communications Inc.
) has offered a fresh bid to acquire
Time Warner Cable Inc.
), yesterday. The company offered $132.50 per share of Time
Warner Cable, including $83 in cash and $49.50 in Charter
The total size of the deal is approximately $61.3 billion.
Excluding debt, the deal size is around $37.3 billion. The
existing Time Warner Cable stockholders will get 45% control of
the merged entity.
However, the board of directors of Time Warner Cable
unanimously rejected the offer from Charter on grounds of
inadequacy. This is the third rejection in the last one year.
Time Warner Cable intends to thoroughly evaluate whether the deal
will add sufficient value to its investors before finalizing.
Several industry researchers have estimated that the offer
size may go up to $160-$162 per share. Nevertheless, Charter has
decided to take the deal directly to Time Warner Cable
The news of a proposed merger between Charter Communications
and Time Warner Cable first surfaced after Liberty Media acquired
a 27.3% stake in the former. Liberty Media is aggressively
pursuing the idea of Charter Communications acquiring a major
cable TV operator in the U.S. such as Time Warner Cable.
), Cox Communications and several private equity firms are also
reported to be exploring strategic options to acquire Time Warner
Time Warner Cable and Charter Communications currently are the
second and the fourth largest cable TV operators in the U.S.,
respectively. A merger between the two companies will
create a formidable player in the industry with nearly 20 million
subscribers across 38 states. The combined entity will be the
third largest pay-TV service provider in the U.S. after Comcast
Currently, Time Warner Cable carries a Zacks Rank #1 (Strong
Buy) and Comcast carries a Zacks Rank #2 (Buy), while both
Charter Communications and DIRECTV have a Zacks Rank #3
CHARTER COMM-A (CHTR): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
TIME WARNER CAB (TWC): Free Stock Analysis
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