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Time Warner Cable Rebuffs Charter Acquisition Bid

14 Jan, 2014 By: Chris Tribbey

Charter Communications Jan. 14 told its investors it has been in discussions with Time Warner Cable executives since June to merge the two companies, with Charter’s latest offer of $132.50 per share rejected by Time Warner Cable.

Time Warner Cable’s board of directors is looking for a price of $160 per share, $100 in cash and $60 per share of Charter common stock, calling the current offer “grossly inadequate.”

“We gave Charter our bottom line, but rather than pursuing this path, Charter has chosen to go public with its third low-ball offer trying to pressure TWC’s board into selling the company at a grossly inadequate price,” Rob Marcus, Time Warner Cable’s chairman and CEO, said in a statement.

Charter executives said they believe the offer — which would reportedly amount to more than $60 billion — is adequate, giving Time Warner Cable shareholders’ approximately 45% ownership in the combined company, which would still be the second-largest cable operator behind Comcast.

As of the end of the third fiscal quarter, Time Warner Cable was the No. 2 cable operator in the U.S. with 11.4 million video subscribers — after losing more than 300,000 subscribers during the quarter — behind Comcast’s 21.6 million. Charter has approximately 4.3 million video subscribers.

A letter to Marcus from Charter president and CEO Thomas Rutledge said Charter’s decision to go public with the discussions was in order to “prepare our companies to meet the challenges of the industry.”

“The financing to complete this transaction is fully negotiated, and we can be in a position to sign commitment letters in a matter of days,” the letter reads. “This transaction is beneficial to Time Warner Cable shareholders who remain invested in the combined company because they realize the value creation from cost reductions, faster organic growth, and leveraged and tax advantaged returns.”

But Marcus said in statement that Charter will have to do better if any deal is going to take place, calling Time Warner Cable a “one-of-a-kind company.”

“We have engaged with Charter, but Charter is not prepared to pay for a one-of-a-kind asset that Tom Rutledge referred to today as the biggest and best [media and entertainment] option available,” he said. “We are confident in our standalone plan and we are not going to let Charter steal the company.”

About the Author: Chris Tribbey

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