Months after a merger of Verizon and Charter was deemed unlikely, fresh reports suggest the cable giant has rejected a takeover bid from the telco worth more than $100 billion.
According to a New York Post report published late Wednesday, Verizon recently proposed a bid that valued Charter Communications Inc. 's stock at between $350 and $400 per share, though the exact timing of the offer was not specified.
According to the report, the bid was rejected as being too low and not being suitable, especially to Charter's major shareholder Liberty Broadband , which holds about 20% of Charter stock and controls just over 25% of the voting rights. Liberty Broadband is a unit of John Malone's Liberty Media empire.
Charter's stock gained nearly 2% Wednesday to close the day at $345.55, including a late spike in the price during the final few minutes of trading.
Talk of Verizon's interest in Charter, the second-largest cable operator in the US after Comcast, first emerged early this year but was soon played down as being too costly, too cumbersome and unlikely to be approved by regulators. The rationale for Verizon's interest is that Charter would not only add scale but also provide valuable network assets for a 5G world and also take out a potential mobile services rival, as Charter is preparing to enter the mobile services market (as an MVNO using, you guessed it, Verizon's network). (See Verizon & Charter: No Sweet Valentines and Comcast & Charter Seal Wireless Pact.)
Verizon has been more successful with its other M&A activities: Like AT&T, it has been seeking to diversify its portfolio and is set to close its acquisition of Yahoo in the near future. It also recently trumped AT&T in the race to acquire 5G spectrum-holder Straight Path and acquired drone management specialist Skyward. (See Verizon Knocks $350M off the Price of Yahoo, Verizon Sports Big Plans for Yahoo, Verizon Buys Straight Path for $3.1B, Beating AT&T to 5G Spectrum and Verizon Adds Drone Management Platform.)
Charter, meanwhile, is still in the late stages of its own post-acquisition integration process, having beefed up last year by acquiring Time Warner Cable and Bright House Networks. (See Meet the New Charter.)
For the first quarter of this year, Charter, which has more than 25 million residential and 1.4 million business customers, reported revenues of $10.16 billion. (See Charter Remains Cautious as Earnings Lag.)
— Ray Le Maistre, , International Group Editor, Light Reading