Charter to buy Time Warner Cable in $78.7bn deal

Cable operators look to better compete with US market leader Comcast

A cable truck returns to a Time Warner Cable office in San Diego, California. Time Warner Cableis nearing an agreement to be acquired by smaller peer Charter Communications , combining the second and third largest US cable operators, people familiar with the matter said. Photograph: Mike Blake/Files/Reuters

A cable truck returns to a Time Warner Cable office in San Diego, California. Time Warner Cableis nearing an agreement to be acquired by smaller peer Charter Communications , combining the second and third largest US cable operators, people familiar with the matter said. Photograph: Mike Blake/Files/Reuters

 

Charter Communications said it would buy Time Warner Cable in a deal valued at $78.7 billion, as the second and third largest US cable operators look to better compete with market leader Comcast.

The equity portion of the deal is $55.76 billion based on Time Warner Cable’s diluted shares outstanding as of March 31st. The company had long-term debt of $22.64 billion, according to its latest quarterly report.

The offer values each Time Warner Cable share at about $195.71 based on Charter’s closing price on May 20th, the companies said in a statement on Tuesday.

The deal comes at a time when the US cable-and-internet companies are looking to cut costs and gain pricing advantages through a flurry of consolidation.

Time Warner Cable’s shares rose 11.6 per cent to $190.50 in premarket trading, while Charter’s stock was up 3.2 per cent at $181.

Reuters