Time Warner Cable (TWC) to be Acquired by Comcast in 45B Deal
Shares of Time Warner Cable (TWC) were up +20.19 or +14.92 percent to $155.50 per share in pre-market trading early on Thursday, after news that Comcast (CMCSA) would be taking the company over in a deal worth over $45 billion. Time Warner Cable closed at $135.31 per share, up +0.41 or +0.30 percent in Wednesdayâ s regular trading session. According to initial reports, the deal combining the nationÃƒÂ¢ s two largest cable providers will have Comcast pay $158.82 per share in stock for Time Warner Cable.
The deal will end the battle with Charter Communications Inc. (CHTR
) Time Warner has been embroiled in for eight months.
New York City based Time Warner Cable Inc. is the nationÃƒÂ¢ s second largest cable telecom provider, operating in 29 states with 31 operating divisions. Originally named Warner Cable Communications, the company, controlled by Time Warner at the time was spun out of the parent corporation in March of 2009. The company continues to use the Time Warner brand but has no corporate affiliation with cable channels owned by Time Warner such as HBO or CNN. Philadelphia, Pennsylvania based Comcast Corporation is the worldÃƒÂ¢ s largest mass media and communications company by revenue. The company is the United States largest cable and home internet service provider and the countryÃƒÂ¢ s third largest provider of home telephone service. The company last acquisition was its takeover of NBC Universal in February of 2013 for $17 billion. Comcast stock was up +1.16 or +2.1 percent to $56.40 per share in pre-market trading on Thursday. The deal with Time Warner Cable will give approximately 23 percent of the merged company to Time Warner Cable shareholders and would have a total of 30 million video subscribers, almost a third of the total U.S. pay TV market. Its closest competitor would then be DirecTV (DTV
) with 20 million subscribers. The proposed merger has already been approved by both companyÃƒÂ¢ s board and is subject to regulatory approval. The merger is expected to be completed by the end of the year. With the Comcast deal, Time Warner Cable has ended its eight month takeover battle with Charter Communications. Charter had bid for Time Warner Cable three times with the latest offer of $132.50. Nevertheless, all bids were rejected by Time Warner Cable, with CEO Rob Marcus saying the company wanted $160.00 per share. Despite agreement from both parties, the merger could have some major hurdles for regulatory approval. Both the FCC and the Justice Department must approve the merger. With ComcastÃƒÂ¢ s 22 million subscribers along with TWCÃƒÂ¢ s 11 million would go over 30 percent of the total U.S. pay TV market, Comcast said it was would divest 3 million subscribers to keep its ownership of the pay TV market under 30 percent. Time Warner stock is already trading over $155 per share. With the $158.50 offer, there is little room for additional upside. Nevertheless, the risk of the merger being blocked by regulators could keep the stock in play for some time. Other News About Time Warner Cable Charter to nominate new board of directors for Time Warner Cable
Article on CharterÃƒÂ¢ s attempt to take over Time Warner CableÃƒÂ¢ s board of directors. Time Warner Cable Customers Get Super Bowl Blackout
Time Warner Cable L.A. customers blacked out for an hour. Other Stocks in the News GM recalls 778,562 compact cars in North America for ignition issue
Models affected were made in 2005 to 2007. Cisco earnings call points to continued uncertainty in the emerging markets
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Published on Feb 13, 2014
By Jay Hawk