Charter to buy Time Warner Cable for $56 bn

New York, May 26

John Malone’s Charter Communications Inc struck a $56-billion deal to buy Time Warner Cable Inc, seeking to combine the third and second largest US cable operators to better compete against market leader Comcast Corp.

Charter, in which Malone-chaired Liberty Broadband Corp owns about 26%, offered about $195.71 in cash-and-stock for each Time Warner Cable share based on Charter’s closing price on May 20, the companies said on Tuesday.

Including debt, the deal values Time Warner Cable at $78.7 billion.

Pay TV companies such as Time Warner Cable and Charter have been experiencing slowing growth over the years as customers access TV shows and movies over the internet through services provided by Netflix Inc and Hulu.

These traditional TV companies are now beefing up their fast-growing, higher-margin internet businesses through consolidation and partnerships.

Charter’s current bid is much higher than its first proposed deal, which Time Warner Cable rejected last year. It is also higher than the $45-billion offer Time Warner Cable had accepted from Comcast. — Reuters