Charter Communications Inc. is planning to buy Time Warner Cable, in a deal worth $55 billion. Charter will pay $195.71 per share – 14 percent above Time Warner Cable’s May 22 close.
Charter will pay $195.71 a share — 14 percent above Time Warner Cable’s May 22 close — with options of $100 and $115 in cash and the remainder in its own stock, according to a statement Tuesday. Bright House Networks, a smaller cable company that Charter has previously agreed to buy, will also be merged into the combined entity.
Charter originally bid $132.50-a-share in January 2014, but that bid was rejected as a “low-ball offer.” Cable provider Comcast made a competing offer, although regulatory scrutiny lead to that offer falling apart.
A Charter/Time Warner Cable merger might not face the same close scrutiny that a Comcast/Time Warner deal attracted, as Federal Communications Commission Chairman Tom Wheeler reportedly called both Time Warner Cable Chief Executive Officer Rob Marcus and Charter CEO Tom Rutledge recently, telling the CEOs that any transaction would be judged solely on merit, explaining there was no outright ban on cable combinations.
A Wheeler statement on Tuesday backed that up, as he said, ““the commission will look to see how American consumers would benefit if the deal were to be approved.”
Time Warner Cable shares rose to $184.83 before the U.S. markets opened, while Charter gained 4.8 percent to $183.31.
For more in-depth details on the Charter/Time Warner Cable deal, visit Bloomberg.