Exclusive: Time Warner Cable open to merger talks with Charter - sources

Mon Apr 27, 2015 8:08pm EDT
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By Liana B. Baker

(Reuters) - Time Warner Cable Inc TWC.N is open to merger discussions with Charter Communications Inc (CHTR.O: Quote) following a failed $45 billion bid by Comcast Corp CMSA.O, according to people familiar with the matter.

Friendly negotiations between the two companies would be in sharp contrast to their acrimonious exchanges in 2013 and early 2014 that ended with Time Warner Cable rejecting unsolicited approaches by Charter and instead finding a white knight in Comcast.

While Charter has yet to make a formal offer, Time Warner Cable believes its smaller peer may be willing to make a bid that is more attractive compared with its takeover attempt two years ago, the people said.

Time Warner Cable also views Charter's stock as a more valuable currency than it did last year given its stock performance since then, the people said. Charter shares are up 33 percent in the last 12 months. Time Warner Cable also is open to deals with companies other than Charter, the people added.

The sources asked not to be identified because the deliberations are confidential. Time Warner Cable and Charter both declined to comment.

Last Friday, Comcast abandoned its $45 billion offer for Time Warner Cable after U.S. regulators raised concerns that the merger would give Comcast an unfair advantage in the cable TV and Internet-based services market.

Analysts expecting Charter to pursue TWC have debated whether Charter would top its previous bid in an effort to secure a friendly deal, or, facing no rival buyer, try to get TWC for less.

Controlled by John Malone’s Liberty Media Corp LMCA.O, Charter had bid $37.3 billion or about $132.50 per share for TWC last year before being beaten by Comcast, whose all-stock deal was initially worth $158.82 per share.   Continued...

Pedestrians walk past a Time Warner Cable customer service center in New York February 13, 2014. REUTERS/Joshua Lott