May 26, 2015 Charter Communications, Inc. and Time Warner Cable Inc. today announced that they have entered into a definitive agreement for Charter to merge with Time Warner Cable. The deal values Time Warner Cable at $78.7 billion. Recently, these same two companies had publicly called off their merger talks. See http://www.truepulse.com/charter-communications-announces-2015q1-results/
In addition, Charter and Advance/Newhouse Partnership (a parent of Bright House Networks) today announced that the two companies have amended the agreement which the two parties signed and announced on March 31, 2015, whereby Charter will acquire Bright House Networks for $10.4 billion. That agreement, as amended, provides for Charter and Advance/Newhouse to form a new partnership (the “Partnership”) of which New Charter will own between approximately 86% and 87% and of which Advance/Newhouse will own between approximately 13% and 14%. The Charter-Advance/Newhouse transaction is expected to close contemporaneously with the Charter-Time Warner Cable transaction.
Charter also announced today that Liberty Broadband Corporation has agreed to purchase, upon closing of the Time Warner Cable transaction, $4.3 billion of newly issued shares of New Charter at a price equivalent to $176.95 per Charter share, which represents Charter’s closing price as of May 20, 2015. As previously-announced, Liberty Broadband will also purchase, upon closing of the Charter-Advance/Newhouse transaction, $700 million of newly issued Charter shares at a price equivalent to $173.00 per Charter share.
Later this morning, at 8am Eastern, there will be a telephone conference call to discuss the deal in more detail.
Charter Communications, the third largest cable operator in the US, rather than invest their money in optical transport backbone, network infrastructure or high-speed fiber access to the home, is investing their money to purchase the second largest cable operation in the US. Rather than network engineering, the focus is on financial engineering. US Federal Reserve Chair Janet Yellen, if you are reading this blog, this transaction is the signal that you have been waiting for. It is time to raise interest rates now.
To see Charter’s press release http://ir.charter.com/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=2053012