The cable company’s stock is up 8.4% after The Wall Street Journal said that John Malone’s Liberty Media is “nearing” a deal to pay close to $2.5B for the equity. If correct, then it would mark Malone’s return to the U.S. cable business — which he left in 1999 when he sold Tele-Communications Inc to AT&T. It also may indicate that Charter CEO Tom Rutledge harbors big ambitions for the No. 8 cable company with 4M subscribers. Charter recently paid $1.63B for cable systems that Cablevision owned in several Rocky Mountain states and lately has figured in some speculation that it may try to buy Cablevision itself — where Rutledge formerly served as COO. Liberty could afford the deal “if it sold some of its non-core public equity stakes” such as stakes in Time Warner, Time Warner Cable and Viacom, Lazard Capital Markets’ Barton Crockett says. With Malone’s history as an owner of cable systems, he adds, Liberty investors “would likely be comfortable with him sticking to his wheelhouse.” Rutledge told analysts this month that “there are some advantages to scale,” but Charter doesn’t need to make a deal to become successful. The centerpiece of his strategy is an effort to upgrade the company’s technology to make its services all digital. “I always had looked at the business of Charter as a greenfield opportunity or a diamond in the rough and it is in the rough,” he says.