Report: Charter hired Goldman Sachs to fine-tune Time Warner Cable offer

Charter Communications (Nasdaq: CHTR), which is partially owned by Liberty Media (Nasdaq: LMCA), is trying to acquire Time Warner Cable (NYSE: TWC) and has hired Goldman Sachs Group to work on an offer for the company. According to Bloomberg, citing unidentified sources, Liberty Media Chairman John Malone and  Charter CEO Tom Rutledge are once again pursuing a potential merger with Time Warner Cable.

Analysts have been skeptical about the deal because acquiring Time Warner Cable would be a challenge for Charter, which is smaller in size and has sizeable debt.  According to Bloomberg, Time Warner Cable in May rejected an informal offer from Charter because the company did not offer enough money. Liberty, which owns 27 percent of Charter, however, is intent upon pursuing the deal because Malone believes the industry needs to consolidate.

Consolidation has been a recurring theme among the nation's top cable MSOs, particularly as programming costs continue to rise and competition from over-the-top players is making it difficult to retain and attract subscribers.

This speculation has picking up steam lately due to public comments from Malone, Rutledge and others in the industry. For example, just last week, Charter's Rutledge told the Wall Street Journal that he thought consolidation among cable MSOs would leave the industry with two major players. In addition, Malone has publicly stated that he sees potential for Time Warner Cable to acquire other MSOs and also floated a scenario in which Charter could buy Time Warner Cable.

And just last month, Comcast co-founder and former Vice Chairman Julian Brodsky told FierceCable that he believes there will soon be another wave of consolidation in the industry, pointing specifically to Charter. "I think there is another wave of it, the most significant thing being Liberty [Media]'s investment in Charter, which I think is a significant event," Brodsky said.

For more:
- see this Bloomberg article


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