They might be after speculation about a transaction fueled a 45% increase in its stock price over the last six months (to $138.22 on Friday), MoffettNathanson Research’s Craig Moffett says this morning. Some analysts say that a buyer — potentially Charter, Comcast, or Cox — would have to pay $150 a share or more to land the No. 2 cable operator. Moffett says he can’t justify more than $120 — and places his target price for the stock at $108. Time Warner Cable “is not doing well, and using outsized broadband price increases to paper over otherwise terrible operational performance is unhealthy and unsustainable.” A buyer, eager to land TWC, could argue that a high price makes sense because it could run TWC better. But there’s “little secret sauce in the cable business,” Moffett says. The “readily-identifiable synergies” probably amount to just $12 a share, “lower than most expect.” And the odds are low that buyers will engage in a bidding war. As the No. 1 cable operator and owner of NBCUniversal, Comcast “has less of a need for a transaction than anyone else in the industry” — especially if federal regulators demand lots of concessions. Privately held Cox hasn’t shown a burning desire to grow. That leaves Charter, which clearly is salivating over TWC. If it’s the lone bidder then it wouldn’t have to offer a big premium. Its pitch to shareholders “is increasingly about the downside if a deal doesn’t happen rather than the upside if it does.” Moffett says.
Are Time Warner Cable Shareholders Expecting Too Much From A Merger Deal?
What's Hot on Deadline
'Don't Breathe' Screams $26M+, Gives Sony 3rd Summer Cash Cow After 'Sausage Party', 'Shallows': Sunday Update
'Bourne' Back At #1 & 'Ice Age' Skates To $300M+, Both With China Assist; 'Pets' Passes $700M WW - Intl Box Office
Cars Damaged During 'Leisure Seeker' Shoot In Atlanta: Production Says It Will Pay Deductibles -- Update
Latest Business News
- Werner Herzog’s “Rogue” Filmmaking Lessons Questioned By Father Of ‘Midnight Rider’ Assistant Killed…
- Telemundo Responds To SAG-AFTRA’s Accusation Of Censorship For Not Airing Ad Critical Of NBCUniversal
- AT&T, HBO Ink All-Platform Content Deal; Programming Set For OTT Service
- Sumner Redstone Agrees To Meet With Granddaughter In Court Settlement
- Viacom Board Voices Confidence In Paramount’s Brad Grey After Thursday Grilling By Board
- Massachusetts Judge Calls On Redstones To Settle Family Dispute Privately