Altice shares are down 5.2%, and Charter Communication’s up 3.2%, after CNBC reported that Patrick Drahi’s European telecom company is thinking about making a $200 billion offer for the No. 2 U.S. cable company.
Although it’s not certain yet that Altice will pull the trigger, it “seems likely,” the report says, as bankers and lawyers work on an offer.
The report follows others indicating that Japan’s SoftBank, which owns Sprint, also might bid for Charter.
In both cases, any offers would likely have to include a great deal of stock. Charter has a market value of about $119 billion. By contrast Altice is valued at $31.0 billion and Softbank is about $86.8 billion.
That might not appeal to Charter’s biggest shareholder, Liberty Media.
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“The idea that we would take equities that we don’t want is probably unlikely,” Liberty CEO Greg Maffei told investors today in his company’s quarterly earnings call. “A lot of it is going to be based on levering up Charter and if we want to lever up Charter, we have that opportunity. So any deal that would be appealing to us and other Charter shareholders would have to add real value and show real capabilities that are beyond what we think is a well positioned company with a very strong management team.”
Charter just had “a solid quarter that sets it up for future growth,” he adds. “We remain very committed to the Charter stock” although “we will listen to all and any offers that come in.”
Asked whether antitrust officials might accept a merger of the No. 2 and No. 4 cable companies, Maffei says, “I can’t imagine why that would be a hurdle. That’s my considered, non-legal, opinion.”
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