Light Reading
Charter makes long-anticipated, unsolicited offer for TW Cable after making repeated overtures and failing to strike deal in December talks.

Charter's $61.3B Bid for TWC Rebuffed Again

Alan Breznick
1/13/2014
50%
50%

Charter Communications President and CEO Tom Rutledge is tired of pussyfooting around with Time Warner Cable. But his patience is about to be tested further. (See Charter Makes $61B Offer to Acquire TWC .)

In a long-awaited move, Charter Communications Inc. formally bid more than $61 billion, including debt, for Time Warner Cable Inc. (NYSE: TWC) late Monday afternoon. The unsolicited offer, which pegs TW Cable's market value at about $37.3 billion, or $132.50 per share, consists of nearly two-thirds cash with the rest in Charter stock, according to various press reports.

Very shortly thereafter, though, the TWC board unanimously rejected the third offer as "grossly inadequate," saying it falls short of the standards set by past cable deals. (See TWC Rebuffs Charter's Latest Offer.)

In an open letter to new TW Cable Chairman and CEO Rob Marcus that Charter posted on its website earlier, Rutledge said his company was making the bid now after repeated overtures to its fellow MSO over the past six months made no headway. He also noted that TW Cable officials rejected Charter's previous offer in talks held last month, prompting Charter executives to go over their heads to TWC shareholders.

But, in a press release issued a couple of hours later, Marcus called the Charter offer "a non-starter" because it represents an EBITDA multiple of only about seven percent. Marcus also said the actual value delivered to TWC shareholders could be well below that, because shareholders would largely be receiving Charter stock with its inherent risks.

Marcus' statement appeared to be a direct reply to Rutledge's open letter. It was in keeping with past indications that TW Cable is reportedly seeking more like $160 per share.

If successful, the takeover of the second largest US MSO by the fourth largest MSO would make the new Charter-TWC a much bigger power in the American pay TV market. But the new company would still have significantly fewer customers than the two market giants -- Comcast Corp. (Nasdaq: CMCSA, CMCSK) and DirecTV Group Inc. (NYSE: DTV).

For months, Rutledge has argued that his respected management team can run TW Cable more efficiently and profitably. TWC suffered one of the worst financial reporting periods in its history in the third quarter, shedding a whopping 306,000 basic video; 24,000 broadband; and 128,000 phone customers in the wake of a bitter, drawn-out, retransmission-consent battle with CBS Corp. (NYSE: CBS). (See TW Cable Hemorrhages Subs.)

In his letter to Marcus, Rutledge held out a peace branch, saying Charter remains "open to real engagement" with TWC and making term revisions. But he also made it clear that Charter is moving ahead with its offer and "preserving all options going forward."

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
albreznick
50%
50%
albreznick,
User Rank: Blogger
1/15/2014 | 12:02:59 PM
Re: Holding out
Good question, Dan. Not clear what the ansween is. TWC could be counting on either Comcast or Cox to come through for it. But both prospects are looking less likely right now.  
DOShea
50%
50%
DOShea,
User Rank: Blogger
1/13/2014 | 10:10:28 PM
Holding out
What--or who--is TWC holding out for? Is there another company that's going to deliver anything closer to the offer it feels it deserves?
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/13/2014 | 6:59:20 PM
TWC has just rejected the bid.
TWC has rejected the bid:

Rob Marcus, Time Warner Cable's Chairman and Chief Executive Officer, said: "Charter's latest proposal is a non-starter. First and foremost, it substantially undervalues TWC and would represent an EBITDA multiple of approximately 7X, well below past transactions in the cable sector. Indeed, our high-quality assets, unique scale, synergy potential, growth opportunities and strong financial position should command a premium valuation compared to precedent transactions, not the discount offered by Charter. Not only is the nominal valuation far too low, but because a significant portion of the purchase price would be in Charter stock, the actual value delivered to TWC shareholders could be substantially lower given the valuation, operational, and significant balance sheet risks embedded in Charter's stock."
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Custom TV
Using Service Quality to Drive WiFi Monetization

10|22|14   |   6:51   |   (0) comments


Live from the SCTE conference: Heavy Reading's Alan Breznick explores the forces shaping the WiFi opportunity in an interview with CableLabs' Justin Colwell and Amdocs' Ken Roulier.
LRTV Custom TV
Distributed Access Architectures – 2

10|21|14   |   8:51:00 AM   |   (0) comments


ARRIS CTO Network Solutions Tom Cloonan discusses why many if not most MSOs will continue with integrated CCAP, while addressing why some are also looking at two futuristic, distributed access architectures: Remote PHY and Remote CCAP.
LRTV Custom TV
Distributed Access Architectures – 1

10|21|14   |   9:01   |   (0) comments


SCTE Sr. Director of Engineering Dean Stoneback discusses the pros and cons of distributed access architecture (DAA) and its various forms, which range from basic Remote PHY to full CMTS functionality in the node.
LRTV Custom TV
The WiFi Road to Riches – 2

10|21|14   |   3:58   |   (0) comments


ARRIS Senior Solution Architect Eli Baruch talks about how MSOs can enable public and community WiFi through 1) outdoor access points, 2) businesses seeking to offer WiFi to customers, and 3) residential WiFi gateway extensions.
LRTV Custom TV
The WiFi Road to Riches – 1

10|21|14   |   10:15   |   (0) comments


SCTE Director of Advanced Technologies Steve Harris discusses WiFi deployments, drivers, challenges and advances, including 802.11ac, carrier-grade WiFi, community WiFi, Hotspot 2.0, Passpoint, WiFi-First and voice-over-WiFi.
LRTV Custom TV
Advantech Accelerates 100G Traffic Handling

10|17|14   |   7:56   |   (0) comments


Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
LRTV Huawei Video Resource Center
Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

10|16|14   |   4:49   |   (0) comments


Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
LRTV Huawei Video Resource Center
Huawei's Comprehensive Storage Solutions Vital for SVR

10|16|14   |   6:16   |   (0) comments


SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
LRTV Huawei Video Resource Center
Mexico's Servitron's Impression of Huawei at CCW 2014

10|16|14   |   6:35   |   (0) comments


Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
LRTV Huawei Video Resource Center
Building a Better Dubai

10|16|14   |   2:06   |   (0) comments


Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
LRTV Huawei Video Resource Center
Huawei Lights Up Malaysia Partner Maju Nusa

10|16|14   |   1:59   |   (0) comments


Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
LRTV Custom TV
Evolving From HFC to FTTH Networks

10|15|14   |   2:19   |   (0) comments


Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Is Health the Killer App for the IoT?
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/22/2014
Drones Hover Over the IoT Sector
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/23/2014
Analysts Warn of Major NFV Gaps
Carol Wilson, Editor-at-large, 10/22/2014
Roku Raises $25M, But for What?
Mari Silbey, Independent Technology Editor, 10/23/2014
AT&T: Merger Review Halt Won't Hurt Us
Alan Breznick, Cable/Video Practice Leader, 10/23/2014
Like Us on Facebook
Twitter Feed