On Monday, January 13, Charter Communications Inc made a formal acquisition offer for a larger competitor Time Warner Cable, paving the way for a potentially controversial fight for control of the the second biggest cable operator in the US, Reuters reported.
The fourth largest cable operator, Charter offered to pay $132.50 per share which would be made up of $83 per share in cash as well as its own stock. The report said the bid was just slightly above the most recent closing price of Time Warner Cable.
The report said the offer was the most daring move that signifies cable billionaire John Malone's belief that new managers would be able to run Time Warner Cable more effectively. The company has lagged by not pouring money to take on rivals and not embracing digital technology. Malone's Liberty Media Corp holds a 27% stake in Charter.
The proposed acquisition, which included debt, was valued at $62.35 billion. The shareholders of Time Warner Cable would hold a 45% stake in the merged firms, the report. The latest proposal is the third attempt of Charter to acquire the firm.
However, the board of Time Warner Cable snubbed the offer just hours after getting it, calling it "grossly inadequate," the report said.
In an interview, Time Warner Cable Chief Executive Officer Rob Marcus told Reuters, "In essence, these guys are just trying to get a premium asset at a bargain basement price. This makes the job of fending it off rather straightforward. Our shareholders will see it as what it is, an attempt to steal the company."
Charter Chief Executive Officer Tom Rutledge told Reuters in an interview that Charter now intends to offer the deal straight to the investors of Time Warner Cable. He said, "(Time Warner Cable) came back to us with a design to be dismissive. They have not engaged with us. All of the conversations have been one way."
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