Light Reading

Comcast May Join Charter Team

Alan Breznick
1/27/2014
50%
50%
Repost This

The end may be coming even sooner than expected for Time Warner Cable.

In the latest chapter of the Time Warner Cable Inc. (NYSE: TWC) saga, Bloomberg is reporting that Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Charter Communications Inc. are close to striking a deal to divide TWC's cable systems between them. Naturally, the proposed agreement in principle would be contingent upon Charter succeeding in its current bid to buy out TW Cable despite the fierce resistance of TWC's board of directors and management. (See Charter's $61.3B Bid for TWC Rebuffed Again.)

As reported by Bloomberg, the deal on the table would call for Comcast to buy three TWC regional clusters -- its huge New York City cable system, sizable North Carolina properties, and assorted New England systems -- from Charter once Charter prevailed. The three asset sales would reportedly add another 3 million subscribers to the customer base of Comcast, which is already by far the largest MSO in the US with nearly 22 million subscribers.

If struck, such a deal would solidify Charter's takeover bid for TWC, whose board and management have been holding out for more than the $61.3 billion, or $132.50 per share, price in Charter's latest offer. Calling the Charter bid "grossly inadequate," TWC officials have reportedly been seeking at least $140 a share for their company. (See TW Cable Strikes Back.)

A pact between Comcast and Charter would also give Charter more leeway to boost its offer for TWC because of the cash that Charter would receive on the other end. Although it's not clear what the three TWC properties would fetch from Comcast, they could be worth as much as $16 billion, based on the price that Charter paid for the Optimum West assets of Cablevision Systems Corp. (NYSE: CVC) last year, Bloomberg said.

Further, a Comcast-Charter alliance would eliminate TWC's biggest prospective "white knights" by aligning Comcast's interests with Charter's. Some industry observers have thought that TWC officials have been holding out hopes that either Comcast or Cox Communications Inc. might come riding to their rescue at the last minute.

But the Bloomberg report notes that Comcast is taking pains not to join Charter in its actual bid for TW Cable. Instead of actively choosing sides in the takeover battle between the fourth and second largest MSOs in the nation, Comcast is apparently lining up on the sidelines, waiting to see how the game unfolds before joining the action.

All three companies declined comment on the reported deal in the works Monday afternoon.

In a note to investors late Monday, Craig Moffett, a principal in MoffettNathanson LLC, argues that a deal with Comcast could increase the attractiveness of Charter's offer to TWC shareholders by enabling Charter to boost the cash portion of its offer. Moffett also contends that Comcast's involvement could make TWC's board and management more amenable to entering into serious negotiations with Charter.

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

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
albreznick
50%
50%
albreznick,
User Rank: Blogger
1/31/2014 | 8:54:06 PM
Re: How big is too big?
Good points, Karl. Well, if they do try to buy these systems that Charter would get from TWC, maybe the feds will finally declare the tipping point. The regulators are watching to see howthis all unfolds. But, of course, they've watchede other deals unfold too and done little or nothing. Where do you think the line should be, or should have been, drawn?     
KBode
50%
50%
KBode,
User Rank: Light Sabre
1/28/2014 | 9:05:29 AM
How big is too big?
Comcast is the biggest TV company, biggest landline company, third biggest phone company, is expanding into electricity markets, and that's not even mentioning their NBC assets. I'm curious just how big is too be for one company to get before the DOJ and FCC start to consider the end result might not be great for consumers? Comcast's biggest problem has been customer support quality, poor in part from many years of growing too quickly and having to integrate disparate systems. 
Flash Poll
LRTV Documentaries
Cable Eyes Big Technology Shifts

4|16|14   |   03:02   |   (4) comments


US cable engineers are facing a lot of heavy lifting in the coming years, notes Light Reading Cable/Video Practice Leader Alan Breznick.
LRTV Custom TV
Maximizing Customer Experience & Assuring Service Delivery in an IP World

4|15|14   |   4:57   |   (0) comments


Steven Shalita, VP of Marketing, NetScout Systems, Inc., discusses the challenges cable/MSO operators face in assuring the delivery of new IP-based services. Key points include the value of proactively managing performance, and using rich analytics and operational intelligence to better understand service and usage trends, make smarter business decisions and ...
LRTV Documentaries
Bye-Bye DVD: Consumers Embrace Digital Video

4|10|14   |   04:17   |   (6) comments


Veteran video analyst Colin Dixon, founder and principal analyst of nScreenMedia, says research shows 56% are using digital video already.
LRTV Documentaries
Video: TW Cable Puts Multicast Gateways to the Test

4|8|14   |   04:13   |   (1) comment


Tom Gonder, a chief architect at Time Warner Cable, explains how its trial of multicast gateways is impacting IP-based video plans.
LRTV Custom TV
Managing & Monetizing Big Data in Operator Environments

4|7|14   |     |   (1) comment


At Mobile World Congress, Gigamon's Director of Service Provider Solutions, Andy Huckridge, and Heavy Reading Analyst Sarah Wallace discuss the 'big data' issues facing carriers and operators today.
LRTV Huawei Video Resource Center
Data Center Energy – Build Your Data Center in a Modular Way

4|7|14   |   2:13   |   (0) comments


Dr. Fang Liangzhou, VP Network Energy Product Line, shared his thoughts about the challenges for data centers during CeBIT 2014.
LRTV Huawei Video Resource Center
Agile Network Solution – An Overview of Huawei's Agile Network Solution

4|7|14   |   2:31   |   (0) comments


Ajay Gupta, Director of Product Marketing, Networking Product Line, gives an overview of the Agile Network Solutions during CeBIT 2014.
LRTV Huawei Video Resource Center
Huawei’s eLTE Voice Trunking, Video and Data Applied for Railways

4|7|14   |   1:38   |   (0) comments


Gottfried Winter is the Sales Director at Funkwerk, a German specialist in GSM-r terminals and a long-time partner of Huawei. At CeBIT 2014, Winter talks to Light Reading about this partnership and the integration of enhanced voice trunking, video and data functions.
LRTV Huawei Video Resource Center
LeaseWeb Speaks Highly of Huawei's Datacenter Products

4|7|14   |   1:37   |   (0) comments


Rene Olde Olthof, Operations Director LeaseWeb, talks about the next data center transformation during CeBIT 2014.
LRTV Documentaries
Comcast: Reshaping the Cable Network Architecture

4|3|14   |   07:11   |   (8) comments


Shamim Akhtar, Comcast's architect and senior director of network strategy, explains why the cable company is moving to a more distributed network architecture.
LRTV Custom TV
VMware CEO Pat Gelsinger at Mobile World Congress

4|1|14   |   3:41   |   (0) comments


VMware CEO Pat Gelsinger speaks to Heavy Reading about the value of virtualization spanning from the data center to service provider networks to mobile devices.
LRTV Huawei Video Resource Center
Analysts' Impressions of Huawei SoftCOM at ONS 2014

4|1|14   |   1:11   |   (0) comments


After visiting the Huawei booth at ONS, Lee Doyle of Doyle Research gives his appraisal of Huawei's SoftCOM solution.
Hot Topics
BlackBerry Invests in Healthcare IT Startup
Sarah Reedy, Senior Editor, 4/15/2014
Cisco, Juniper Treating Gear Against Potential Heartbleed
Dan O'Shea, Managing Editor, 4/11/2014
Cisco & VMware Are Apple & Google of SDN
Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/14/2014
T-Mobile Petitions Operators to Kill Overages
Sarah Reedy, Senior Editor, 4/14/2014
Mobile Apps Susceptible to Heartbleed, Too
Sarah Reedy, Senior Editor, 4/14/2014
Like Us on Facebook
Twitter Feed