Post by The Ultimate Nullifier on May 26, 2015 8:09:45 GMT -6
variety.com/2015/tv/news/charter-to-buy-time-warner-cable-in-78-7-billion-deal-1201504777/
Charter Communications has confirmed that it will buy Time Warner Cable in a deal that valued at $78.7 billion. The mega merger sets Charter up as a formidable rival to Comcast Corp. in the cable and broadband service arena.
The agreement hammered out in the four weeks since Comcast withdrew its $45 billion acquisition offer for TW Cable works out to a pricetag of $195.71 per share for TW Cable shareholders, based on Charter’s market closing price on May 20.
The combination will give the enlarged Charter a footprint of 23.9 million subscribers in 41 states, notably the prime markets of New York City and Los Angeles where TW Cable is entrenched. The company projects that after the deal closes, it would have 17.3 million video subscribers and 19.4 million broadband subs. By comparison, Comcast has 27.2 million subscribers, nearly 23 million of which are traditional video subs and 22 million are broadband customers.
Charter CEO Tom Rutledge said Tuesday he is confident that the transaction will win regulatory approval and close by the end of this year.
The complicated Charter-TW Cable transaction includes a $10.4 billion deal to buy Bright House Networks, the cable operator that has long been managed by TW Cable. It also calls for John Malone’s Liberty Broadband to invest another $5 billion in Charter. Liberty already owns a minority interest in the company and has been the driving force behind its acquisition efforts during the past two years.
To facilitate the Bright House buyout, Charter and Bright House parent Advance/Newhouse Partnership will form a new partnership of which New Charter will own between approximately 86% and 87%, and of which Advance/Newhouse will own between approximately 13% and 14%.
Furthermore, Liberty Broadband Corp. has agreed to purchase $4.3 billion of newly issued shares of New Charter at a price equivalent to $176.95 per Charter share. As previously announced, Liberty Broadband will also purchase $700 million of newly issued Charter shares at a price equivalent to $173 per Charter share.
Following these deals, Time Warner Cable shareholders, excluding Liberty Broadband and its affiliates, are expected to own between approximately 40% and 44% of New Charter, and Advance/Newhouse is expected to own between approximately 13% and 14%. Liberty Broadband is expected to own between approximately 19% and 20%.
“With our larger reach, we will be able to accelerate the deployment of faster internet speeds, state-of-the-art video experiences, and fully–featured voice products, at highly competitive prices,” Rutledge said. “In addition, we will drive greater competition through further deployment of new competitive facilities-based wifi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large, small and medium sized business services marketplace. New Charter will capitalize on technology to create and maintain a more effective and efficient service model. Put simply, the scale of New Charter, along with the combined talents we can bring to bear, position us to deliver a communications future that will unleash the full power of the two-way, interactive cable network.”
The merger of Charter and TW Cable is not expected to draw the same level of opposition that ultimately scuttled Comcast’s bid, in part because Charter is a smaller company overall. But the transaction will have a thorough review at the FCC, chairman Tom Wheeler promised early Tuesday.
“The FCC reviews every merger on its merits and determines whether it would be in the public interest. In applying the public interest test, an absence of harm is not sufficient. The commission will look to see how American consumers would benefit if the deal were to be approved,” Wheeler said in a statement.
Charter Communications has confirmed that it will buy Time Warner Cable in a deal that valued at $78.7 billion. The mega merger sets Charter up as a formidable rival to Comcast Corp. in the cable and broadband service arena.
The agreement hammered out in the four weeks since Comcast withdrew its $45 billion acquisition offer for TW Cable works out to a pricetag of $195.71 per share for TW Cable shareholders, based on Charter’s market closing price on May 20.
The combination will give the enlarged Charter a footprint of 23.9 million subscribers in 41 states, notably the prime markets of New York City and Los Angeles where TW Cable is entrenched. The company projects that after the deal closes, it would have 17.3 million video subscribers and 19.4 million broadband subs. By comparison, Comcast has 27.2 million subscribers, nearly 23 million of which are traditional video subs and 22 million are broadband customers.
Charter CEO Tom Rutledge said Tuesday he is confident that the transaction will win regulatory approval and close by the end of this year.
The complicated Charter-TW Cable transaction includes a $10.4 billion deal to buy Bright House Networks, the cable operator that has long been managed by TW Cable. It also calls for John Malone’s Liberty Broadband to invest another $5 billion in Charter. Liberty already owns a minority interest in the company and has been the driving force behind its acquisition efforts during the past two years.
To facilitate the Bright House buyout, Charter and Bright House parent Advance/Newhouse Partnership will form a new partnership of which New Charter will own between approximately 86% and 87%, and of which Advance/Newhouse will own between approximately 13% and 14%.
Furthermore, Liberty Broadband Corp. has agreed to purchase $4.3 billion of newly issued shares of New Charter at a price equivalent to $176.95 per Charter share. As previously announced, Liberty Broadband will also purchase $700 million of newly issued Charter shares at a price equivalent to $173 per Charter share.
Following these deals, Time Warner Cable shareholders, excluding Liberty Broadband and its affiliates, are expected to own between approximately 40% and 44% of New Charter, and Advance/Newhouse is expected to own between approximately 13% and 14%. Liberty Broadband is expected to own between approximately 19% and 20%.
“With our larger reach, we will be able to accelerate the deployment of faster internet speeds, state-of-the-art video experiences, and fully–featured voice products, at highly competitive prices,” Rutledge said. “In addition, we will drive greater competition through further deployment of new competitive facilities-based wifi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large, small and medium sized business services marketplace. New Charter will capitalize on technology to create and maintain a more effective and efficient service model. Put simply, the scale of New Charter, along with the combined talents we can bring to bear, position us to deliver a communications future that will unleash the full power of the two-way, interactive cable network.”
The merger of Charter and TW Cable is not expected to draw the same level of opposition that ultimately scuttled Comcast’s bid, in part because Charter is a smaller company overall. But the transaction will have a thorough review at the FCC, chairman Tom Wheeler promised early Tuesday.
“The FCC reviews every merger on its merits and determines whether it would be in the public interest. In applying the public interest test, an absence of harm is not sufficient. The commission will look to see how American consumers would benefit if the deal were to be approved,” Wheeler said in a statement.