Time Warner: TAG believes a higher bid for TWX is likley, re-merging of CBS/VIAB is the next expected deal (83.13)
TAG notes that with TWX closing just 2% off the FOXA bid, the Market is likely expecting a higher bid. They agree, but with few other bidders, they believe FOX may be negotiating against itself. With FOXA pre-bid trading at a higher multiple than TWX, they believe that a FOXA bid of $95 would still be accretive on an EV/EBITDA basis. The next deal they expect is a re-merging of CBS and VIAB. With the Supreme Court having confirmed the broadcast retransmission fees (with the Aereo decision), there's no reason why VIAB and CBS shouldn't re-merge in order to enhance their negotiating position with distributors.