Yesterday, Reuters reported that
) is considering all strategic options to acquire full or partial
Time Warner Cable Inc.
). Recently, the company selected Barclays Plc. as an advisor to
evaluate the deal.
Earlier, Comcast had hired JPMorgan Chase & Co. as its
adviser. Both JPMorgan and Barclays will now evaluate the Time
Warner Cable acquisition deal.
Charter Communications Inc.
) offered a fresh bid to acquire Time Warner Cable. The company
offered $132.50 per share of Time Warner Cable, including $83 in
cash and $49.50 in Charter stock.
The total size of the deal is approximately $62.35 billion.
Excluding debt, the deal size is around $37.3 billion. The
existing Time Warner Cable stockholders will gain a 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.
The news of a proposed merger between Charter Communications
and Time Warner Cable first surfaced after
Liberty Media Corp.
) 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.
We believe Comcast may offer higher bids for Time Warner
Cable, however, the deal may face severe regulatory hurdles from
Comcast and Time Warner Cable are the first and second largest
cable TV operators in the U.S., respectively. A merger between
the two entities may create monopolistic power in the industry.
Currently, both Comcast and Time Warner Cable have a Zacks Rank
CHARTER COMM-A (CHTR): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
LIBERTY MEDIA-A (LMCA): Free Stock Analysis
TIME WARNER CAB (TWC): Free Stock Analysis
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