Shares in Time Warner Cable, Charter, and Cablevision popped this afternoon after Bloomberg reported that the one-time King of Cable is “exploring scenarios” to help Charter buy one of the other companies. Investors have speculated for weeks about a deal, seen as a real possibility since May when John Malone‘s Liberty Media paid $2.6B for a 27.3% stake in Charter. Today’s story took things further, citing unnamed sources who added details — including one who said that Malone and Charter “would like to get a friendly deal done [with Time Warner Cable] in the coming months.” Charter needs to show that it can afford to play; its $12.5B market value pales next to Time Warner Cable’s $31.7B. A buyer likely would have to pay much more: Evercore Partners’ Bryan Kraft says this week that TWC shareholders would want “a significant premium” to compensate them for giving up control, accepting additional risk, and creating most of the cost-saving synergies.Even so, Bloomberg says that Liberty is considering arrangements that would enable Charter to borrow against Liberty or Time Warner Cable’s assets. The story adds that Charter also is weighing a bid for Cablevision Systems, valued at $4.3B. Share prices for all three companies settled slightly after the early-afternoon spike. In late trading, Time Warner Cable was +4.6%, Charter was +3.8%, and Cablevision was +4.8%.
Is John Malone Crafting A Cable Mega-Deal?
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