With Comcast Merger Up In Smoke, Charter Woos Time Warner Cable

Comcast's proposed $45.2 billion acquisition of Time Warner Cable hit a brick wall when the Federal Communications Commission recommended what's called a "hearing designation order," a procedural move that tasks an administrative law judge to determine if a merger would be in the best interest of the people. Rather than go down that road, Comcast bailed on the deal, taking a $32 million hit in the process. As to Time Warner Cable, it looks as though Charter may make a run at the cable company.

There are multiple reports that Charter is formulating a plan to bid on TWC, and if accepted, it would create a cable giant with 15.6 million video subscribers and 16.4 million broadband customers. For the sake of comparison, Comcast, the largest cable company in the U.S., is sitting pretty with 21.7 million video subscribers and 20.7 million broadband customers.

Charter Van

This isn't the first time Charter has tried to acquire TWC. Back in January of last year, Charter proposed a takeover deal at $132.50 per share in cash and stock. TWC rejected the bid and countered at $160 per share, $100 of which it wanted paid in cash. That's when Comcast entered the fray with its $45.2 billion offer, at the time valuing TWC at nearly $159 per share.

Not only would Charter have to improve its offer this time around, but it also has to hope that TWC doesn't hold a grudge over previous negotiations. After its initial offer was rejected, Charter attempted a hostile takeover by presenting its offer directly to shareholders.

Assuming Charter can jump over those hurdles, it may then face regulatory scrutiny like Comcast did. Either way, Charter seems motivated to go down this road, especially since it lost out on an opportunity to acquire Bright House Networks for $10 billion, a deal that was contingent on Comcast acquiring TWC.