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Charter Communications Inc. plans to buy Time Warner Cable Inc., clinching a deal made necessary by slowing growth in the U.S. cable industry -- and more expensive by last-minute competition from French billionaire Patrick Drahi.
Charter will pay $195.71 a share -- 14 percent above Time Warner Cable's May 22 close -- with options of $100 and $115 in cash and the remainder in its own stock, according to a statement Tuesday. Bright House Networks, a smaller cable company that Charter has previously agreed to buy, will also be merged into the combined entity.
It took Charter and its main shareholder John Malone more than a year to reach a deal with No. 2 Time Warner Cable after their January 2014 bid of $132.50-a-share was rejected as a "low-ball offer" and Comcast Corp. jumped in with a competing offer. Although Charter got another shot when regulatory scrutiny caused the Comcast deal to fall apart in April, talks were disrupted by Drahi's Altice SA, which also approached Time Warner Cable in the past weeks.
"The idea that Time Warner Cable and Charter are merging isn't a surprise, but the price raises some eyebrows," Craig Moffett, an analyst at MoffettNathanson in New York, said May 24 after Bloomberg News reported a deal was near. "Altice undoubtedly contributed to Charter having to pay such a steep price to close the deal."
[Editor's Comment: Original Submission - before the purchase was confirmed]
(Score: 2) by takyon on Tuesday May 26 2015, @11:25PM
My laziest submission yet. Will regulators kill this deal? And:
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 0) by Anonymous Coward on Tuesday May 26 2015, @11:36PM
I certainly hope so.
(Score: 2) by frojack on Tuesday May 26 2015, @11:43PM
My guess is yes, it will be approved.
Mostly government objections only happen when the proposed merger strengthens the position of one of the two largest companies in the field. Anything that makes the third through Nth player stronger generally never gets any serious questions.
No, you are mistaken. I've always had this sig.
(Score: 0) by Placenta on Wednesday May 27 2015, @12:47AM
Why shouldn't it be approved?
If there are at least four major players, and many smaller ones, to begin with, then there's clearly competition existing already. Even if one of the major players merges with a lesser player, then there is still ample competition.
As industries mature they consolidate. It's the nature of American business.
(Score: 3, Insightful) by SpockLogic on Wednesday May 27 2015, @03:20AM
Other than us consumers getting screwed by a new monopoly with the worst attributes of the old companies combined, can't think of a reason.
Overreacting is one thing, sticking your head up your ass hoping the problem goes away is another - edIII
(Score: 1, Informative) by Anonymous Coward on Wednesday May 27 2015, @04:20AM
Ample competition? What? There's certainly not competition in all the areas where they're the only game in town, and in the areas where they do overlap with other competitors, now there will be less competition.
(Score: 0) by Anonymous Coward on Wednesday May 27 2015, @09:57PM
They don't compete in the first place, not even the "smaller" ones like BrightHouse. In Indianapolis, for example, you can either get Comcast or BrightHouse, but the choice depends on where you live, not which one offers the better deal or service; you can't actually choose one or the other except by moving.
(Score: 0) by Anonymous Coward on Wednesday May 27 2015, @10:21PM
While I'm sure you are probably being sarcastic cable prices, in the last year alone, have only been going up. The last thing we need is even less competition.
(Score: 4, Informative) by takyon on Tuesday May 26 2015, @11:54PM
Including Time Warner Cable's debt of about $23 billion, Charter is paying $78.7 billion. Charter has some existing debt, and will be borrowing as much as $29.3 billion to pay for TWC and Bright House. The combined entity will end up with between $61.5 billion and $65.7 billion in debt [wsj.com].
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 1, Insightful) by Anonymous Coward on Wednesday May 27 2015, @12:24AM
Wonder how many people are about to get a big BIG pay cheque?
(Score: 1, Funny) by Placenta on Wednesday May 27 2015, @12:53AM
Why shouldn't they?
If they've arranged a deal that brings value to the companies involved, then there's no reason why they shouldn't be compensated by those companies for their efforts.
Likewise, if they've been negatively affected by such a deal, such as their positions becoming redundant and eliminated within the combined organization, then there's no reason why they shouldn't be compensated for their losses.
(Score: 0) by Anonymous Coward on Wednesday May 27 2015, @01:21PM
a deal that brings value to the companies involved
Please, elaborate on what this 'value' is.
(Score: 3, Insightful) by Tork on Wednesday May 27 2015, @12:55AM
Slashdolt Logic: "25 year old jokes about sharks and lasers are +5, Funny." 💩
(Score: 4, Funny) by Anonymous Coward on Wednesday May 27 2015, @12:45AM
In the current era of rapidly shifting lifestyles driven by innovations in digital technology, American companies will now be even more effective in competing globally against formidable international competitors! And the new company will realize synergies that can only result in best-in-class product and service offerings and compelling new value propositions for their combined customer bases, as well as operational efficiencies realized for the benefit of their stakeholders.
Let's let these guys roll out their transformational network plays which they'll finally be able achieve at scale.
(Score: 1, Interesting) by Anonymous Coward on Wednesday May 27 2015, @01:53AM
What if municipalities start terminating monopoly ordinances for the cable operators? They would have overpaid horrendously.
A guy can dream, can't he? :)
(Score: 2, Interesting) by mendax on Wednesday May 27 2015, @01:57AM
Comcast and Time Warner, two very evil companies, wanted to merge to become another Great Satan. Fortunately, the DOJ of the original Great Satan did something apparently honest and rational for a change and decided to step in, essentially killing the deal. Now, Charter and Time Warner want to create another incestuous corporate marriage and create a slightly less worrisome evil corporation.
I've never been a Time Warner or Comcast company but I have been a Charter cable and Internet customer before Wave bought up their business in my area. Let me say that Charter's customer service was borderline acceptable at the time I was their customer but the quality of their cable and Internet service was at times beyond awful, and it didn't get any better with Wave. The worst was a three-day Internet outage because of some failed hardware in a vault on my street. However, they were the only guys in town at the time with high-speed Internet service and so I was doomed to pay for their slow "high speed" Internet and awful analog cable service. So, I don't see how a merger of Charter and Time Warner will improve things.
Incidentally, we now have more competition here today. I subscribe to ATT's Uverse service and it's pretty decent for the most part and their customer service has been excellent. The Internet is fast and mostly reliable with little hiccups here and there but the kind we all expect. Wave is still here and I get some junk mail from them at least once a week. However, I won't ever patronize them again unless ATT's service gets a lot worse.
It's really quite a simple choice: Life, Death, or Los Angeles.
(Score: 3, Interesting) by githaron on Wednesday May 27 2015, @01:31PM
I actually have had very good experiences with Charter. The occassional outages were usually very short (few hours). They lent me a modem without charging me an equipment fee. Their prices were/are quite reasonable (~$45 after the special ran out). I got upload and download speeds that were faster than advertised. Every few years they would upgrade my connection without being asked and without charging me more. This last time I went from a 30Mb/s connection to a 100Mb/s connection overnight. If they had upload speeds that matched their download speeds, it would have been heaven. Unfortunately, I recently moved outside their service area.
(Score: 1, Touché) by Anonymous Coward on Wednesday May 27 2015, @08:39AM
Yes, the world needs this deal. Without it we might as well jump off a bridge.