Liberty Media CEO Greg Maffei met with Time Warner Cable’s (TWC) CEO Glenn Britt a few weeks ago to discuss a merger, according to a report on CNBC.
They talked about cable consolidation but no offer was made, according to the report, which noted the…
Liberty Media CEO Greg Maffei met with Time Warner Cable’s (TWC) CEO Glenn Britt a few weeks ago to discuss a merger, according to a report on CNBC.
They talked about cable consolidation but no offer was made, according to the report, which noted the two executives speak regularly.
Liberty would use cableco Charter Communications, in which it holds a 27% stake, to strike a deal. However, Liberty – in partnership with Charter – has not settled on a specific deal to pursue to expand. The John Malone-controlled group is reported to be aggressively reviewing potential acquisition targets as it aspires to consolidate the US cable market.
Liberty has talked to financing sources regarding funding for a transaction between Charter and TWC, according to the report. It has considered a “small premium deal” that would need US$15bn of new debt plus a significant chunk of Charter equity, or a merger of equals.
TWC is not interested in a tie-up with Charter, according to the report citing sources close to the company. It has reportedly re-enlisted long-time adviser Morgan Stanley and hired a PR firm to guard against a public play from Liberty.
The target’s share price leapt on the back of the news, from US$96.15 to US$103.93 – more than 8%. Meanwhile Charter’s stock jumped 5.4% from US$110.61 to US$116.61.
Billionaire John Malone is chairman of Liberty Media and the European-focused cableco Liberty Global. His experience in US cable dates back to the 1970s and he is considered a key figure in the industry, although he hadn’t participated in the American market for a number of years up until his purchase of a stake in Charter.
Liberty acquired a 27.3% stake in Charter for US$2.6bn from three private equity firms earlier in the year. Liberty was advised by Liontree Advisors on that purchase.
