UPDATE: Executives for Comcast and Time Warner Cable are scheduled to meet with U.S. Justice Department officials on Wednesday to discuss ways that they can save their proposed $45.2 billion merger, according to the Wall Street Journal, quoting unnamed sources.
The parties have not met face to face since the deal was originally proposed in February 2014. Analysts say the DOJ is going to demand major concessions.
"It's not the total number of broadband subscribers, which is a problem for the government," noted BTIG Research analyst Richard Greenfield on CNBC's Squawk Box. "The government is going to want something very substantial to approve.
The news comes after Bloomberg reported Friday that the DOJ is seriously considering blocking the deal. See below:
Antitrust attorneys for the U.S. Justice Department are nearing a recommendation to block the proposed $45.2 billion merger of Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC), according to a Bloomberg report that cited anonymous sources.
DOJ attorneys could submit their review as early as next week, the report said. They'll present their findings to Renata Hesse, deputy assistant attorney general for antitrust. She will then confer with top DOJ officials to determine whether a federal lawsuit should be filed to stop the merger.
Bloomberg said Justice Department staffers have been contacting numerous parties involved in the transaction in recent weeks to support such a potential lawsuit.
Also foreboding for the deal: There doesn't appear to be any negotiation with Comcast by either the Justice Department or Federal Communications Commission. Such bargaining might include having Comcast sell off assets viewed as anticompetitive, or mandating a change in business practices.
Comcast spokeswoman Sena Fitzmaurice responded with the following statement: "There is no basis for a lawsuit to block the transaction. The merger will result in significant consumer benefits--faster broadband speeds, access to a superior video experience, and more competition in business services resulting in billions of dollars of cost savings."
Responding to the report, Wall Street analyst firm New Street Research wrote, "Comcast response suggests continuing confidence in its legal position but that is very different from expressing confidence that the government agrees with them."
Comcast continues to lobby stridently for the deal, publishing a series of blog posts earlier this week detailing claims of how the deal will spur availability of broadband services and aid the creative community.
For more:
- read this Bloomberg story
- read this Wall Street Journal story
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