Comcast came up as the biggest loser in its failed bit to acquire rival Time Warner Cable (TWC) for $45 billion. Comcast wasted over $30 million on lobbying and tucked its tail between it legs once it became clear that U.S. regulatory agencies would not approve the merger.
Comcast’s loss is now Charter’s gain according to a fresh report from Bloomberg. We first heard of Charters inklings to cozy up with TWC back in late April, but it appears that the relationship has gotten especially serious in recent days. The news agency has learned that Charter is willing to pay around $195 per share (a 14 premium over TWC’s last closing price). The stock and cash deal is estimated to be worth $55.1 billion, $10 billion dearer than Comcast’s offer.
By sucking up TWC’s life force, Charter will catapult from fourth place in the U.S. cable market to a more comfortable second place, right behind Comcast.
Bloomberg is confident that the deal will be announced tomorrow morning, which is bad news for French telecom Altice SA. French billionaire Patrick Drahi has a controlling interest in Altice and has shown great interest in purchasing TWC. However, it looks as though Drahi and hits cohorts will be resigned to retreat in the face of a more worth battlefield competitor.
“The idea that Time Warner Cable and Charter are merging isn’t a surprise, but the price raises some eyebrows,” said MoffettNathanson analyst Craig Moffett. “Altice undoubtedly contributed to Charter having to pay such a steep price to close the deal.”
While the Charter-TWC tie-up is interesting in its own right, there’s another wrinkle in this cable industry love fest. Charter’s hunger for cable companies won’t stop at TWC; the already announced deal to purchase Bright House Networks for $10.4 billion will still go forward according to Bloomberg.