Here we go again: Time Warner Cable execs will spend the holiday weekend negotiating with Charter Communications and Luxembourg-based Altice Group about a sale that could be decided “as soon as next week,” Bloomberg reports.
That jibes with Wall Street Journal stories about intensifying negotiations — including one that says Altice’s founder, billionaire Patrick Drahi, met with TWC chief Rob Marcus in New York this week about a potential cash-and-stock offer.
Investors believe that something is about to happen with the No. 2 cable and broadband operator: TWC shares appreciated 9.4% just this week, especially after Altice announced that it had agreed to buy No. 7 operator Suddenlink and word spread that it also had approached TWC.
That raised the possibility of a bidding war with Charter. The John Malone-controlled cable company has coveted TWC and made a hostile offer early last year that drove execs to see Comcast as a white knight. CEO Brian Roberts withdrew his $45 billion acquisition offer last month after learning that Justice Department and FCC officials opposed the deal, believing that it would give Comcast too much power over broadband.
TWC has a market value of $48.4 billion based on today’s closing price of $171.18.
But Wunderlich Securities Matthew Harrigan says that there’s “a good likelihood that TWC could be divvied up between Charter and Altice with no profligate bidding war or huge regulatory cloud. TWC’s still-in-process operational improvement and synergies suggest to us that the eventual takeout price could be more in the $185-$190 vicinity than the prior oft-cited $170 level.”