Time Warner Cable Shoots Down Charter Communication's Acquisition Bid
January 13, 2014 9:26 PM
comment(s) - last by
It was valued at more than $61 billion USD
Charter Communications Inc. is trying to lure Time Warner Cable into
an acquisition deal
, but Time Warner says Charter has been making low-ball offers.
Charter reportedly offered Time Warner $132.50 per share for an acquisition of the company. The offer consists of $83 cash per share and about $49.50 in stock. Including debt, the deal is worth more than $61 billion ($37.3 billion excluding debt).
However, Time Warner called it a low-ball offer, saying it would be open to a deal of about $160 per share ($100 in cash and $60 in Charter common stock).
“Here’s what happened: We didn’t put our house up for sale, and we got a knock on the door and someone made a low-ball offer,” said Rob Marcus, Time Warner CEO. “They want a premium asset at a bargain-basement price, and that’s just not going to happen.”
Charter made other bids throughout last year, valuing Time Warner at $114 per share in June and $127 per share in October. They were all rejected by Time Warner.
[SOURCE: NY Daily News]
There are a couple of reasons why Charter would want to acquire Time Warner. For starters, the merger would help Charter in future negotiations with content providers. Billionaire John Malone is looking to make a provider of TV, Internet and phone service for about 20 million users in 38 U.S. states, and merging with Time Warner would make the new company the third-largest pay-TV operator by customers. This would give it some leverage against content providers, which continue to raise prices annually.
Aside from that, Charter can use its net operating losses as a way of helping out with future taxes.
On Time Warner's side of things, Charter says it can help the company build up better customer satisfaction, as Time Warner has the second-lowest score among all companies ranked in the American Customer Satisfaction Index for 2013. Time Warner also lost 215,000 video subscribers in Q4 after a 304,000 loss in the previous quarter.
But it looks like the two will have to continue battling over price until a compromise is reached (or not).
This article is over a month old, voting and posting comments is disabled
1/14/2014 9:02:43 PM
Yet two more telecommunications giants trying to sniff each other's butts and see if the time is ripe to buy each other and form even larger companies.
Why do these companies always focus on getting bigger in such single areas? Diversify instead of monopolizing! It's better for us all of you do and will bring stability to your company.
1/15/2014 7:25:31 AM
The bottom line is, they don't care about us. And their executives don't really care about their company, likely, due to their "golden parachute". Once companies started rewarding CEO's, regardless of whether they succeeded or failed, things started getting really stupid!
"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki
FTC Announces Crackdown on Computer Speedup/Tech Support Scams
November 20, 2014, 1:40 PM
Nokia Lumia 635 LTE Windows Phone is Only $40 at Best Buy on Black Friday
November 18, 2014, 11:59 AM
It's Official: Twitter is Profitable "Junk"
November 16, 2014, 10:45 PM
Microsoft Rolls Out $199 “Work & Play Bundle” for Its Subscription Services
November 11, 2014, 11:18 AM
Best Buy Offering up $200, 50” Panasonic LED HDTV on Black Friday
November 11, 2014, 10:48 AM
Dropbox, Microsoft Announce Partnership, Tight Integration
November 4, 2014, 3:44 PM
Most Popular Articles
Austrian Pilots Call Surface 3 Pro Flight Bag a "Dream Come True"
November 14, 2014, 2:00 PM
U.S. Marshals Using Fake, Airplane-based Cell Towers to Scan Cell Phones of Americans
November 14, 2014, 9:05 AM
Wal-Mart: Miss Thanksgiving, Get Xbox One + Master Chief Collection for $299
November 17, 2014, 9:40 PM
Nokia Explores Two Paths Back to the Smartphone Market
November 14, 2014, 9:05 PM
Microsoft: All* Lumias Will Get Windows 10; Adds Real-Time Battery Live Tile
November 13, 2014, 6:32 PM
Latest Blog Posts
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information