Charter Communications (NASDAQ: CHTR) is meeting with banks to line up $25 billion to $30 billion in financing to buy Time Warner Cable (NYSE: TWC), according to the Wall Street Journal.
The report, citing anonymous inside sources, comes as Greg Maffei, CEO of Charter's largest stakeholder, Liberty Global, told investors that Liberty would maintain its 25 percent stake in a combined Charter-TWC and that such a merger attempt would be "friendly" this time around.
Inside Charter, the WSJ says there's a belief that the company can't deliver another "low-ball" offer, similar to the $132.50-per-share bid the company placed in January 2014 that was rejected. At the time, TWC said it would only accept an offer of $160 per share.
Given the currently high trading price of Charter's stock, there's also a belief that any friendly offer would have to be rich in cash in order to be accepted by TWC. Analysts have forecast a possible TWC demand of up to $180 a share this time around. A winning Charter bid could be comprised of up to $100-per-share in cash.
Charter and TWC have been at the center of cable-industry M&A talk ever since Comcast (NASDAQ: CMCSA) walked away from its $45 billion bid to buy TWC last month.
The cascading effect of that failed attempt has wiped out a related deal to launch a new cable company, GreatLand Communications. It also scrubbed an agreed-upon $10.4 billion purchase of Bright House Networks by Charter.
Last week, at the NCTA's rebranded INTX show in Chicago, Cablevision (NYSE: CVC) CEO James Dolan boldly asked TWC CEO Rob Marcus to buy his company ... while sitting right next to him, on stage, at a panel event.
Media investment analysts, however, think that it's the Charter-TWC deal that's going to happen.
"Our meetings at the Cable Show reinforced our view that a CHTR / TWC deal is likely," reads a report released Monday by New Street Research.
For more:
- read this Wall Street Journal story
- read this Denver Post story
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