Comcast announced its $45.2 billion deal to acquire Time Warner Cable in mid-February, beating out Charter Communications, which had been making overtures for Time Warner Cable. Now, five months later, Charter stock has gained 18% as Wall Street seemed relieved that the debt-heavy company wouldn’t have to borrow additional billions of dollars to acquire Time Warner Cable, noted a Philadelphia Inquirer story.
Charter stock closed Friday at $162.27, up from $137.57 on 2/12, the day before Comcast’s plans were announced. Meanwhile, Comcast stock closed Friday at $54.55, down from $55.24 on the day before its February TWC announcement.
Comcast stock, meanwhile, has treaded water as it finds itself in a tough regulatory review of the merger–last week the FCC appointed a team to evaluate the merger and began its 180-day “shot clock” to review it.
As we’ve reported, the merger-review team includes William Rogerson, a Northwestern University economics professor who voiced opposition to Comcast’s acquisition of NBCUniversal. Rogerson previously served as FCC chief economist.
Hillary Burchuk, a trial attorney with the FCC’s general counsel office, also will evaluate the merger for public benefits or harms. She is a former attorney in the DOJ antitrust division.
The department separately has been asking questions for more than a month. Patrick Gottsch, founder and board chair of Rural Media Group, said he and other company executives spoke with DOJ antitrust officials in May for four hours.
The meeting followed a congressional hearing. Gottsch testified that Comcast had dropped the Rural Media’s RFD-TV network in Colorado and New Mexico in 2013. RFD airs agricultural news, country and bluegrass, and rural lifestyle segments.
Gottsch said Comcast’s decision wasn’t justified. Comcast said it needed the RFD-TV bandwidth for more popular channels.
DOJ also asked CBS, Disney and Discovery Communications to speak their minds on the proposed merger. “Presumably, the media companies expressed concern over NBCUniversal receiving preferential treatment if the deal is approved. Netflix and Dish Network (are already on record as opposing the deal,” noted a Seeking Alpha post.
Experts believe that Comcast may have to agree to concessions to get approvals. Comcast already has offered concessions and says the merger won’t eliminate any MVPD competitor.
“The regulatory review and the uncertainty has held back the stock,” Dave Heger, communications services analyst with Edward Jones in St. Louis, said of Comcast. “There is a dark cloud hanging over it with the deal, while with Charter there is some relief.”
See the Philadelphia Inquirer story here.
