Charter Communications (CHTR) to Buy Bright House Networks

Shares of Charter Communications Inc. (CHTR) were trading up +14.61 or +7.97 percent to $198.00 per share in Tuesday's premarket. The move came after news broke early this morning that Charter will be acquiring privately held cable company Bright House Networks LLC in a deal valued at an estimated $10 billion. Charter Communications stock closed at $183.39 per share, up +3.39 or +1.88 percent in Monday's regular trading session.

Stamford, Connecticut based Charter Communications Inc. is a large domestic provider of cable television and high speed internet services.
The company is the fourth largest U.S. cable operator after Comcast Corp. (CMCSA), Time Warner Cable (TWC) and Cox Communications (COX). Charter provides service to over 27.5 million customers in 31 states.

In January of last year, Charter bid $132.50 per share for Time Warner Cable. The bid was rejected with Time Warner Cable accepting an offer of $158.82 per share from Comcast Corp. In late April of 2014, Comcast and Charter announced that if the merger between Comcast and Time Warner was successful, Charter would acquire 1.4 million Comcast/Time Warner customers, making Charter the second largest domestic cable provider.

A third part of the deal would have Comcast spin off 2.5 million subscribers into a new public company, where Charter would hold a 33 percent stake with an option to purchase the whole company and leaving Time Warner Cable stockholders with a 67 percent stake.

Syracuse, New York based Bright House Networks LLC is a privately held company and the sixth largest cable operator in the United States. The company's largest presence is in Florida where it is the second largest cable provider. The company serves approximately 2.5 million customers in five states: Alabama, California, Florida, Indiana and Michigan.

The deal between Charter Communications and Bright House Networks has not yet been officially confirmed. Nevertheless, according to a source familiar with the matter the deal would be contingent on the successful acquisition of Time Warner Cable by Comcast with approval from U.S. regulators.

Before talks between Bright House Networks and Charter began earlier this month, Bright House and Time Warner Cable had an operating agreement for Bright House to share programming rates and technology with Time Warner. The agreement was then brought up when Comcast made a bid for Time Warner Cable last year.

If the deal between Charter and Bright House goes through, Bright House owner, Advance Newhouse would become Charter's biggest shareholder unseating Liberty Media Corp, Charter's current largest stockholder. Neither company has commented on the tentative deal as of this writing.

With the previous agreements both companies have with Time Warner and Comcast, the contingency of the Comcast's successful acquisition of Time Warner Cable is key to the deal going through. Charter stockholders are showing their enthusiasm for the deal in this morning's premarket. Whether the move in Charter stock will hold will depend largely on the formal announcement of the deal.

Other News About CHTR

Charter Communications: A Buy on Favorable Developments

Zacks Investment Research upgraded the company to a Rank #2 (Buy).

Charter CEO Rutledge sees pay jump in 2014

Rutledge's compensation for 2014 rose +259 percent to $16.1 million.

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Published on Mar 31, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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