John Malone locked in battle with Altice for Time Warner Cable
John Malone, the US cable tycoon, is locked in a $48bn battle for control of Time Warner Cable, the second-largest US cable company, against Franco-Israeli billionaire Patrick Drahi, chairman of France’s Altice.
Charter Communications, the US cable company backed by Mr Malone, is leading the negotiations to acquire Time Warner Cable as discussions continued through the weekend, according to people familiar with the matter.
One person informed on the talks said that Charter was prepared to pay a large premium to secure Time Warner Cable.
Some of these people added that Time Warner Cable could reach a deal with either party before the end of the long US weekend, as markets are closed on Monday for the Memorial Day holiday.
All, however, cautioned that no outcome was certain and that the situation remained fluid.
People familiar with Altice’s thinking said that Mr Drahi was serious in his pursuit of Time Warner Cable. Altice has lined up financing from banks including JPMorgan Chase, Barclays, Royal Bank of Canada, Nomura and Société Generale to support a possible bid, some of these people said.
But one other person close to the company said Altice had only just struck a $9bn deal five days ago and the company usually studies a new market for several months before seeking further deals.
Altice, TWC and Charter all declined to comment
Charter had until last week appeared seemingly uncontested in its efforts to acquire its larger rival Time Warner Cable, until Altice made its first foray into the market by acquiring Suddenlink, the US’s seventh-largest cable operator.
Following the deal, which valued Suddenlink at $9.1bn including debt, Altice fed speculation that further moves would follow soon by declaring that any company smaller than the largest US cable operator Comcast was a potential consolidation target.
Time Warner Cable only last month saw a $45bn takeover attempt by Comcast, which was agreed in February 2014, collapse because of regulatory scrutiny.
That deal was originally struck as Time Warner Cable sought to escape the clutches of Charter, which had previously offered $132.50 in cash and stock. Time Warner Cable asked Charter for $160 per share at the time but then agreed a deal with Comcast that valued it at $158.82 per share.
Shares in Time Warner Cable rose 3.1 per cent to $171.18 on Friday, giving the company a market value of $48.4bn as speculation of a deal with either Altice or Charter continued.
The takeover talks come amid sweeping changing in the US cable industry as consumer habits are shifting away from television sets in favour of mobile and broadband connections and as content providers are exerting greater pricing pressure on distributors for premium programming that keep their customers’ attention.
By consolidating, cable operators look to cut costs and use their scale to combat prices set by content providers.