Changes at Charter?
In the filing, Allen, who built his fortune as a founder of Microsoft Corp. (Nasdaq: MSFT) and purchased Charter in 1998, said he could take a look at "other extraordinary corporate transactions, such as mergers or reorganizations or sales of material assets."
One hurdle for any potential buyer to overcome is Charter's $19 billion debt load.
Still, some analysts believe there's a better chance Charter will be sold off than take the route to privatization.
"Charter should and will be acquired eventually," Pali Capital analyst Richard Greenfield told The Wall Street Journal. "I just don't find the reference in the SEC filing as groundbreaking information. Charter is always looking at strategic alternatives."
News of Allen's filing sparked heavy trading of Charter stock yesterday, with shares finally closing at $2.57, down 11 cents. Its high for the day was $3.10.
Charter shares were trading at $2.41 each, down 16 cents (6.23 percent), in early trading Thursday.
If Allen opts to take Charter private, the MSO would follow in the footsteps of major U.S.-based MSOs such as Insight Communications Co. Inc. and Cox Communications Inc.
Cablevision Systems Corp. (NYSE: CVC) is also on the road to privatization, though there are questions whether shareholders will approve the deal that is now on the table. (See Stock Spike Threatens Cablevision Deal and Cablevision Keeps Family Ties .)
A Charter spokeswoman declined to comment on Allen's intentions for the MSO, which had 5.67 million customers as of June 30. (See Charter Revenues Rise.)
— Jeff Baumgartner, Site Editor, Cable Digital News