Few people think that Comcast's (NASDAQ: CMCSA) proposed purchase of Time Warner Cable (NYSE: TWC) is in regulatory jeopardy.
"But the market is worried," said high-profile media analyst Craig Moffett, citing the growing spread between the two companies' respective share prices--a metric that has swelled to over 8 percent, the highest it's been since the deal was first announced in February.
The market, Moffett states, "knows more than the sum of its participants. And based on the data it's kicking off, the market is giving the deal only a 75 percent chance of gaining approval from the Federal Communications Commission and the U.S. Department of Justice.
"Initially, investors didn't like this deal," Moffett notes. "Now the market loves the optionality of wireless, enterprise and synergies, and the share buybacks that will follow. Now they really, really want the deal to close."
Meanwhile, "the winds in Washington are blowing the wrong way," he adds, with "the vehemence of the opposition … spooking investors."
According to Multichannel News, that "vehemence" was on full display for Dish Network (NASDAQ: DISH) earlier this week, with company chairman Charlie Ergen and his executive team "blitzing" FCC officials with their opposition of the deal.
"Since Comcast and TWC are on independent trajectories toward offering nationally distributed OTT services outside of their respective cable footprints, TWC will compete head-to-head with Comcast absent the merger," Dish said in a filing to the FCC. "And, importantly, they would need to rely on each other's broadband pipes to provide nationwide OTT services, thus providing each company with an incentive to keep their respective pipes open. If the merger is approved, however, the combined companies would offer only a single OTT service, or perhaps forego altogether launching a nationwide OTT service, thus depriving consumers of important competitive choices."
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