Time Warner Cable Board Rejects Charter's Bid

Time Warner Cable said late Monday its board of directors "had unanimously rejected a third grossly inadequate proposal" by Charter Communications Inc. Earlier today, Charter Communications, the fourth-largest U.S. cable operator, had formally made a bid for Time Warner Cable, the second-largest U.S. cable operator, for a massive $61.3 billion in cash and stock. 

The bid, first reported by Bloomberg News, had been expected for months.

The deal was valued at about $132.50 a share -- with Time Warner shareholders receiving $83 cash per share and $49.50 in Charter stock. Excluding debt, Charter would have paid about $37.3 billion under the terms of the deal.

According to reports, Tom Rutledge, president/chief executive officer of Charter, said Time Warner had not initially offered a “serious response." Charter had approached Time Warner informally in December, according to Bloomberg, but was rejected.

On Monday, Charter’s stock closed on the day down 1.6% to $134.22; after-hours trading witnessed the stock rising 1.7% higher to $136.50. Time Warner Cable stock closed down 0.7% to $132.40. After-hours trading of Time Warner Cable rose 1.7% to $134.51.

John Malone, chairman of Liberty Media, which is a major shareholder in Charter, had been pushing for consolidation of the cable industry -- and a takeover of Time Warner -- to combat growing digital media competition.

Time Warner Cable has about 12 million video customers in major markets such as New York, Los Angeles and Dallas. Charter has around 5.7 million video customers. The deal would have created a company of about 20 million customers in 38 stations providing TV, broadband and phone service.

1 comment about "Time Warner Cable Board Rejects Charter's Bid".
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  1. Jill Kennedy from Manka Bros., January 13, 2014 at 11:59 p.m.

    It doesn't matter than Time Warner Cable rejected this first offer - this deal is going to get done and it's not going to be pretty. It's the beginning of a nasty year of media consolidation and it is going to result in a bloodbath across the industry...

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