Time Warner Cable (TWC) is looking at Cablevision and Cox Communications as potential acquisitions, according to three people familiar with the cableco’s thinking cited by Reuters.
The US’ second-largest cable operator is reportedly trying to fend…
Time Warner Cable (TWC) is looking at Cablevision and Cox Communications as potential acquisitions, according to three people familiar with the cableco’s thinking cited by Reuters.
The US’ second-largest cable operator is reportedly trying to fend off interest from John Malone-controlled Liberty Media, which owns a stake in smaller cableco Charter Communications and has talked up consolidation in the industry.
Liberty CEO Greg Maffei is said to have held talks with TWC CEO Glenn Britt regarding a potential merger with Charter, but Britt is not keen according to people familiar with the matter cited in the report. TWC executives believe a merger with Charter would overload its balance sheet with debt and doubt the potential synergies.
TWC would rather be an industry consolidator and has contacted Cablevision and Cox in recent months to discuss mergers, among other options, according to one of the sources. TWC’s share price rose 3.94% the same day the report was published.
The talks are not at an advanced stage nor have their respective owners displayed an interest in selling, the report said. Cablevision is owned by the Dolan family while the Cox family control their eponymous operator.
Cablevision, which offers services in the New York area, may be the more likely target as its founder and chairman is 86 and the family is not looking to stay in the industry long term, a person familiar with the company cited in the report said.
TWC trails only Comcast in the US cable market and claims 15 millions customers. It has a market capitalisation of US$32.73bn and net debt of US$23.5bn according to its Q1 results. Last year it generated US$21.4bn in revenue. In comparison Cablevision posted revenues of US$6.7bn and Cox disclosed US$9.6bn.
Cable veteran Malone bought a 27% stake in Charter Communications via Liberty Media this spring and has talked up the prospect of consolidation in the US market, much like he has done via Liberty Global in Europe. Charter is significantly smaller than TWC recording US$7.5bn revenues for 2012.
