Comcast to bid $45bn for Time Warner Cable

Prepare for a show - the US' biggest pay-TV company is set to snatch Time Warner Cable from the jaws of Charter.

by Rachel Savage
Last Updated: 13 Feb 2014

Comcast, the US’ largest cable TV company, is set to buy its smaller rival Time Warner Cable in a deal that values it at $45.2bn (£27.2bn), as American pay-TV companies battle it out to consolidate the fragmented market.

Comcast is going to pay almost $159 per share for TWC, over 17% above its closing share price of $135.51 in New York on Wednesday, according to media reports. A formal announcement is expected later today.

The offer comes after TWC rejected a ‘grossly inadequate’ $132.50 per share offer from its baby competitor Charter Communications in January, a deal worth $61bn including debt. Charter is the third-placed minnow of the US cable market, with a market cap of just $14bn compared to TWC’s $38bn and Comcast’s mammoth $145bn.

Comcast and TWC would together control around a third of US video subscribers and 36% of broadband customers, and dominate lucrative cable markets including Los Angeles, Philadelphia, Chicago and Dallas.

That’s a hefty chunk of the market that may not sit well with US competition regulators. Comcast is also under the regulatory microscope over its $17bn acquisition of the bit of entertainment company NBCUniversal that it didn’t own last year.

While Comcast prepares to box with bureaucrats, Charter will be slouching off into the corner. Liberty Media, run by ‘cable cowboy’ John Malone, bought 27% of Charter last May and was also said to be keen on making a move Spanish cable operator Ono. Liberty also owns the UK’s Virgin Media.

However, Ono was also being sniffed at hungrily by Vodafone, which bought up German cable provider Kabel Deutschland last year. Ono is reported to be snubbing a buyout for a €7bn (£5.8bn) float instead. MT is just going to sit back and watch the pay-TV show.

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