Charter, Comcast in talks over Time Warner Cable bid


Charter CommunicationsCharter Communications has reached out to Comcast this week about teaming up to buy Time Warner Cable, after TWC rejected Charter’s $37.3 billion takeover bid, says a Reuters exclusive.

“Charter approached Comcast on Wednesday to discuss carving up the second-largest U.S. cable company’s systems and subscribers,” the story said. “Charter, the No. 4 U.S. cable provider, and Comcast, the top U.S. cable provider, are in preliminary discussions about how to structure a potential alliance, the people said. One possibility is that Charter buys all of Time Warner Cable and sells off some of its markets and subscribers to Comcast, one of the people said.”

It was not immediately clear which geographic markets are under discussion, but analysts have said that Comcast would be interested in Time Warner Cable’s largest markets such as New York, Los Angeles and Dallas.

Securing backing from Comcast could also allow Charter, with a market capitalization of around $14 billion, to pay more for Time Warner Cable, which has a much larger market value of $38 billion.

Charter has said the combined company may have to do “swaps and divestitures” of cable systems to serve regions more efficiently, according to its investor presentation on Wednesday. Comcast is not interested in doing swaps, but is seeking to buy systems, Reuters was told.

See the Reuters story here.

RBR-TVBR observation: Comcast could easily get the bid up to TWC’s requested $160/share asking price. If Comcast-Charter did buy TWC together, they could split the company, adding some regional markets and Comcast-owned cable networks in the same swipe. Whichever company or companies eventually acquire TWC, they’ll be buying its subscriber list, so to speak. Wherever they overlap, there will be massive layoffs from consolidation, as par for the course. And yes, that immediately accrues to a better bottom line for shareholders.