Your Web News in One Place

Help Webnuz

Referal links:

Sign up for GreenGeeks web hosting
January 14, 2014 03:33 am GMT

Charter Offers $61.3 Billion In Cash And Stock To Acquire Time Warner

If you were worried about the consolidation of ISPs, telcos, and media companies, this should make you uncomfortable: Charter Communications has bid a massive$61.3 billion for Time Warner Cable. According to Bloomberg, this is the third largest deal since 2009. The total buyout would consist of$83 in cash for each Time Warner share, and $49.50 in Charter stock for a total of around$132.50. In regular trading today, Time Warner closed at$132.40, and is up over the bid price in after-hours trading, indicating that investors expect a higher total deal value by the time anything is completed. According to a letter sent to Time Warner management by Charter, and published by the latter company, it approached its now potential purchase several times in 2013, only to be rebuffed until December. Time Warner then wanted more money than what Charter offered. Charter wasn’t pleased with the expectation of a higher per-share premium, given that Time Warner’s stock had risen on hopes of a deal; the sweetener was already in place, in its view. Or, as Charter phrases it: Instead, you came back with a verbal offer at an unrealistic price expectation which ignores a full 39% premium already reflected in Time Warner Cable’s stock (as of last Friday), widespread shareholder endorsement of a deal, and Time Warner Cable shareholders’ approximately 45% ownership in the upside of the proposed transaction. Both companies offer cable, Internet, and some telephony services. Time Warner also operates some television properties. The combination of the two companies would mean greater constriction of the pool of companies that deliver and create content through a number of mediums. In the age of net neutrality, and lawsuits pending that could see its reversal, the Charter-Time Warner deal should make the back of your neck prickly. For now, it appears that Time Warner investors will at least try to get a higher price for their shares. If there can be parity between what Charter is willing to pay and what Time Warner will demand is an open question. Bloomberg also notes that Comcast could be a suitor. A bidding war at these price points would be expensive indeed.

Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/C-MOb9CCrSY/

Share this article:    Share on Facebook
View Full Article

Techcrunch

TechCrunch is a leading technology blog, dedicated to obsessively profiling startups, reviewing new Internet products, and breaking tech news.

More About this Source Visit Techcrunch