Comcast and Time Warner set out $45bn merger stall to regulators and investors

Comcast and Time Warner Cable (TWC) started setting out their case to regulators and investors yesterday for a contentious $45.2 billion bid to unite America's two largest cable television and internet service providers.

The all-stock deal, which analysts and consumer groups said would draw intense scrutiny from regulators, would “not reduce competition in any relevant market because our companies do not overlap or compete with each other,” said Brian Roberts, Comcast’s chief executive. “In fact, we do not operate in any of the same zip codes,” he added.

However, shares in TWC were trading at about $145 in mid-morning trading in New York, up 7 per cent on the previous day’s close but well below the $158.82 per share headline price of Comcast’s offer because of expectations of a lengthy antitrust battle.

Charter Communications, TWC’s smaller rival, had targeted it for six months in an increasingly hostile pursuit in which it had offered $132.50 per share in cash and stock.

The deal received early support from Paulson & Co, the hedge fund which owns six million shares of Time Warner Cable, praising it as “the best possible outcome for TWC shareholders” and “delivers full value in an all stock deal from the most capable acquirer.”

Mr Roberts – who conducted negotiations from the snowfields of Sochi, where he is overseeing the Comcast-owned NBC network’s Winter Olympics coverage – said the deal would create “a world-class blue-chip company committed to innovation”. He said Comcast was prepared to divest three million subscribers if the deal went through.

A merger between Comcast and TWC would create an industry behemoth that would control a third of the US video subscriber market and 35.9 per cent of US broadband subscribers, according to MoffettNathanson Research estimates. – Copyright The Financial Times Limited 2014