Charter Communications Inc. announced that they will be working with Goldman Sachs Group Inc for the Time Warner Cable Inc bid. The move by billionaire John Malone and Charter CEO Tom Rutledge indicates that the company is serious about the potential merger after being declined by Time Warner earlier this year. Time Warner Cable Inc. rejected the proposal submitted by Charter last May due to Charter not offering a premium.
"Malone has clearly thrown down the gauntlet," said Paul Sweeney, an analyst at Bloomberg Industries. "He believes the cable industry needs further consolidation."
John Malone, owner of 27% of Charter, is now looking into to the potential acquisition in an effort to turn Charter Communications Inc into "a horizontal acquisition machine." Liberty Media Corp. (LMCA), the Malone owned holding company, is looking into the options to be used for the merger.
The acquisition of Time Warner Cable is considered as a challenge for Charter due to the small size of the company and with the existing debts of Charter. Time Warner has a market value of US$33.1 billion compared to Charter's US$12.6 billion.
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