US cableco Charter Communications and takeover target Time Warner Cable have extended the deadline for the latter’s shareholders to decide which form of consideration they wish to receive until 12 May. In early February, Charter issued US$1.7bn of 5.875% senior secured notes due 2024, which may be used to help fund the TWC acquisition if its shareholders choose the cash option.
US cableco Charter Communications (NASDAQ:CHTR) and takeover target Time Warner Cable (NYSE:TWC) have announced that they have extended the deadline for the latter’s shareholders to elect which form of consideration they wish to receive until 12 May.
TWC shareholders can opt to receive either US$100 in cash and shares in a new parent company equal to 0.5409 Charter shares, or US$115 in cash and new company shares equal to 0.4562 Charter shares.
The companies had not, however, previously disclosed such an ‘election deadlline’ and Charter did not respond to a request for clarification.
New Street Research analysts said the move implies the parties expect the deal to close on 19 May.
“Interestingly, in the proxy, it notes that the election deadline is “five business days prior to the expected closing date”, which means that Charter is perhaps indicating that closing should be on May 19th (a week after the CPUC ruling), although they may be somewhat forced into this disclosure, as they have to give 20 business days’ notice ahead of the election deadline,” they said.
“So Charter basically needs to give a disclosure 25 business days before they think the deal will close, and they just gave the disclosure, implying May 19th closing.”
Charter’s merger with TWC and smaller player Bright House Networks are still subject to the approval of the FCC, Department of Justice and California Public Utilities Commission (CPUC).
The company expects the CPUC decision no earlier than 12 May. The deadline for TWC shareholders to choose their form of consideration may be further extended depending on the timing of regulatory approvals, the fulfilment of other conditions and closing.
In early February, Charter issued US$1.7bn of 5.875% senior secured notes due 2024, which may be used to help fund the TWC acquisition if its shareholders choose the US$115 cash option. The remaining proceeds, currently being held as cash and cash equivalents, will be used to refinance debt.
Last week, Charter priced US$300m of senior unsecured notes due 2026 in an add-on offering to its US$1.2bn note issuance the previous week, with the proceeds to be used for refinancing.
Charter announced last May that it had agreed to buy TWC and Bright House for US$56bn and US$10.4bn respectively. The merged entity would become the country’s second largest cableco behind Comcast with some 25 million customer relationships.