Charter Communications (NASDAQ: CHTR) is closing in on a long-anticipated acquisition of Time Warner Cable (NYSE: TWC), according to several reports, which peg the overall deal value at $55 billion.
According to The Wall Street Journal, Charter's deal will value TWC at $195 a share, up significantly from the $132 per share it unsuccessfully offered TWC shareholders in January 2014.
TWC shareholders can choose between a deal that offers $100 a share in cash and the rest in Charter stock, and a deal that contains $115 a share in cash. Both WSJ and Bloomberg say an agreement could be announced as soon as Tuesday.
The deal accommodates an earlier agreement by Charter to purchase Bright House Communications for $10.4 billion. Charter President and CEO Tom Rutledge would be CEO of the combined companies.
The combination of the three MSOs would create a total customer base of 23 million, second only to the 27 million of Comcast (NASDAQ: CMCSA), which walked away from its own $45.2 billion agreement to purchase TWC one month ago after regulators soured on the deal.
While Comcast's deal had no breakup fee, the Charter agreement comes with a breakup fee of $2 billion, WSJ reports.
Charter's deal will undoubtedly face tough regulatory scrutiny, as well, but it was revealed last week that FCC Chairman Tom Wheeler reached out to both Charter and TWC and assured them that his agency isn't against the general idea of big cable mergers.
Reports of a pending Charter-TWC deal come after European telecom conglomerate Altice SA made a splash last week, purchasing a $9.1 billion controlling share in St. Louis cable operator Suddenlink Communications and entering into its own talks with TWC.
Altice could still throw a higher bid at TWC.
For more:
- read this Bloomberg story
- read this Wall Street Journal story
Related links:
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Charter and Bright House agree to move forward with original $10.4B merger deal