Investors are becoming concerned about the regulatory climate being faced by Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC) as they attempt to close a $45 billion merger.
And that has resulted in a widening chasm between the company's stock prices, increasing the price Comcast shareholders will ultimately pay to acquire TWC.
Both Comcast and TWC shareholders have approved the deal, which calls for 2.875 shares of Comcast stock to be paid for each share of TWC stock.
As Bloomberg reports, the differential was about 3.2 percent in April, two months after the proposed merger was announced. However, TWC's share price has been impacted by the Federal Communications Commission's decision to take a time out in its regulator review of the deal to consider more dissenting voices,
As of close of business Friday on Wall Street, the differential between the two stocks was about 7.6 percent.
"This was just going to get waved through," said Christopher Pultz, head of merger arbitrage for Kellner Capital, to Bloomberg. "All of the sudden people realize, maybe there's a little more risk in this than [they] thought."
For more:
- read this Bloomberg story
Related links:
Comcast shareholders approve TWC purchase by 99 percent-plus margin
FCC stops 'shot clock' on Comcast-TWC review to consider more comments
Comcast says merger foes guided by self-interest, not consumer benefit
When Cohen attacks: Comcast exec lays into merger critics at commentary deadline
Comcast-TWC input period ends: 64K comments received, 65 groups urge rejection