Charter initially expressed interest in buying Time Warner Cable in late 2013. John Malone, chairman of Liberty Media, which is a significant investor in Charter, pushed for that deal.
Investment banker Jefferies wrote in a report on Thursday: "Such a transaction would face less risk (execution/regulatory), and we expect [Time Warner Cable] would seek a significant premium over [Charter’s] prior offer.”
Jefferies changed its view of Time Warner Cable’s stock from a "hold" to a "buy."
In addition, a merger of Charter and Time Warner Cable’s traditional cable/video assets would be less of a concern for regulators -- combining the fourth-largest cable operator, Charter, which has 4.3 million video subscribers, and the second-biggest cable operator in Time Warner, which has 12 million. Comcast is the largest U.S. cable operator, with 22 million.
One analyst speculated that Charter’s current $10.4 billion deal to buy Bright House Networks -- another major cable operator, with two million video subscribers -- could be dropped in favor of a renewed bid for Time Warner Cable.
Time Warner Cable negotiates programming deals for Bright House and could block Charter’s bid for a takeover of that cable operator.
Plus, the collapse of the Comcast-Time Warner Cable deal means that Charter won’t get to purchase nearly 4 million Comcast cable customers -- something that Comcast agreed to as part of its deal to acquire Time Warner Cable.
Making it official that the Comcast-Time Warner potential deal would be abandoned, Brian Roberts chairman/chief executive officer of Comcast, stated: "Today, we move on. Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn’t agree, we could walk away.”