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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.