Charter Communications Inc. has made an offer to buy Time Warner Cable Inc. for about $132.50 a share, placing the value of the company at more than $61 billion, Bloomberg reports. TWC is the second-largest cable provider in the U.S.
"The proposal includes about $83 cash per share and about $49.50 in Charter stock, Tom Rutledge, Charter’s Chief Executive Officer, said in an interview," the story reports. "The offer is the third-largest for any global company since 2009, data compiled by Bloomberg show."
The report adds: "Charter today sent a letter to Time Warner Cable Chief Executive Officer Rob Marcus, explaining why the company’s offer is beneficial for shareholders. Charter is attempting to acquire Time Warner Cable, a company with an enterprise value more than twice Charter’s size, to create a provider of TV, Internet and phone for about 20 million customers in 38 states. Rutledge said he last proposed an offer in late December, around Christmas, which Marcus rejected."
In a telephone interview today, Rutledge reportedly said: “We haven’t received a serious response. Our objective was to talk to management and try to get them engaged. They have not, so we’re going to make our case to shareholders about why this deal is good for them and hope they ask management and the board to watch out for the interests of shareholders.”
Bloomberg adds: "Rutledge and Charter Chief Financial Officer Chris Winfrey met with Marcus and Time Warner Cable CFO Artie Minson in December to walk through details of the offer, including structure, financing, tax and cash flow implications, according to the letter. Charter indicated its willingness then to submit a proposal in the low $130s, including a cash component of $83.
"When Time Warner Cable responded to that with a request for a higher bid including a higher cash component, Charter determined it wasn’t interested in pursuing a merger agreement, according to the letter."
The report adds: "Time Warner Cable’s response was ‘not a serious offer,’ said Rutledge, who declined to say the exact price. ‘They knew the price they were offering was designed to not appeal.’
"Charter is preserving ‘all options going forward,’ including nominating a slate of directors to Time Warner Cable’s board, according to a person familiar with the matter. Still, Rutledge would prefer to complete a friendly cash and stock deal as soon as possible, he said. Charter has ‘fully negotiated’ financing and can be ‘in a position to sign commitment letters in a matter of days,’ according to the letter."