Bidding War for TWC Looks Likelier
It increasingly looks like there could be one heck of a bidding war for Time Warner Cable.
In the latest chapter in the long-running saga about Time Warner Cable Inc. (NYSE: TWC)'s future, the Wall Street Journal reported Thursday night that Patrick Drahi, the French billionaire who heads Altice , met in New York earlier this week with TWC Chairman and CEO Rob Marcus.
The Journal story says the two top executives discussed a potential pact between Altice and Time Warner Cable as Altice, which just struck a $9.1 billion deal to buy a controlling stake in Suddenlink Communications , moves to play a major role in the US cable market. (See Altice to Buy Suddenlink in $9.1B Deal, What's It All About, Altice? and Is Altice the Great US Cable Consolidator?)
Drahi's reported meeting with Marcus comes as Charter Communications Inc. continues to woo Time Warner Cable as well, following last month's collapse of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s $45.2 billion agreement to buy out TWC. With Time Warner Cable reporting strong subscriber growth and improved financial metrics in the past two quarters, analysts were already expecting Charter to up the ante for TWC. Now that Altice is in the picture, TWC's selling price is likely to shoot even higher.
Alarmed by the Federal Communications Commission (FCC) 's opposition to the Comcast-TWC deal, Marcus and other top MSO executives have expressed concern that the Commission might look to block other big cable deals as well. In an effort to ease those concerns, FCC Chairman Tom Wheeler reportedly called Marcus, Charter CEO Tom Rutledge and other top US cable executives this week to assure them that the Commission won't necessarily oppose any and all future cable deals. The Journal says Wheeler, without getting into specifics, told the execs that the FCC would weigh each prospective deal on its own merits.
In addition, Wheeler reportedly reiterated his call for cable operators to expand beyond their current territories and overbuild each other to stoke more video and broadband competition in the US market. The FCC chairman delivered a similar message in his keynote address at the cable industry's Internet & Television Expo (INTX) in Chicago two weeks ago. (See Wheeler to Cable: Suck It Up.)
— Alan Breznick, Cable/Video Practice Leader, Light Reading