Will Charter Communications Inc (CHTR) Bid For Time Warner Cable Inc (TWC) Again?

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Charter Communications Inc (NASDAQ:CHTR) could make another bid to acquire Time Warner Cable Inc (NYSE:TWC). The Justice Department is preparing to block the proposed merger between Time Warner Cable and Comcast Corporation (NASDAQ:CMCSA), which creates room for Charter to return to Time Warner Cable. Billionaire John Malone, whom controls Charter, has said that he would give it another shot if the Time Warner – Comcast deal fell apart.

Charter Communications Inc (NASDAQ:CHTR)’s largest investor, billionaire John Malone, favors a deal with Time Warner Cable, in case the latter fails to combine with Comcast under the current proposal. However, the fallout of the deal between Comcast and Time Warner Cable would also hurt Charter, given that it was scheduled to benefit from nearly 3.9 million Comcast cable-TV customers.

Justice officials opposing the merger

The officials at the Justice Department are not impressed with the proposed arrangement to bring Comcast and Time Warner Cable under one roof. As such, they are seeking to block the $42.5 billion transaction. However, such a move would impact several other pending cable deals, including the one between Charter and Bright House Networks. The FCC could still save the proposed deal between Comcast and Time Warner.

Buyout price

As for Charter Communications Inc (NASDAQ:CHTR), a failed deal between Comcast and Time Warner Cable could open up another opportunity to return to the negotiation table with the latter. Last year, Charter offered to buyout Time Warner Cable for $132 a share, but that offer was rejected because it didn’t measure up to the expectations of Time Warner Cable. However, if Charter decides to make another bid for Time Warner Cable, it would likely have to pay a higher price, between $150 and $160 a share.

While Time Warner Cable could demand a higher price, it would not be in nearly as good of a position as it was prior, with two suitors.

Complex deals

Even with such an offer, a deal is not guaranteed, as Time Warner Cable could itself pursue a deal with Bright House Networks, thereby locking Charter Communications Inc (NASDAQ:CHTR) out of that asset.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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