In a much anticipated deal, the fourth largest cable company in the US – Charter Communications – could be purchasing the second largest cable company in the US, Time Warner Cable. The merge could see the business quadrupling their customer base and becoming the leader of cable in America.
$195 a Share
According to reports, Charter are set to pay the cable operator $195 a share; quite a large sum over the $122 share price that Time Warner is currently worth. Just a small fraction will be paid in cash, with the rest being handed over in stock that Charter owns. It is also thought that a smaller cable company, Bright House Networks, will be merged into the new, giant cable corporation.
A Rocky History
Charter originally made a play for the company back in 2014, but their initial bid was rejected thanks to Comcast Corp coming in with a bigger offer. Under scrutiny the Comcast deal fell apart, leaving Charter to have another shot at Time Warner Cable. Patrick Drahi, a French billionaire, nearly ruined the deal once again when he came in with a bigger offer earlier this year. However, the $55.1 billion counter-offer from Charter seems to have sealed the deal.
One Giant Entity
Insiders believe that the deal could be completed any day now, creating a Time Warner and Charter Communications entity that will be huge. Although there have been some eyebrows raised over the price, it is thought that both parties are happy with the overall result. The giant entity would have around 20 million subscribers and secure a place as the second biggest cable company in America. It will, however, continue having to play catch up to Comcast as they focus their efforts on new technology. Regulators will also be putting the $55.1 billion deal between Time Warner and Charter under strict scrutiny, so watch this space.