Charter arranging debt package to bankroll TWC takeover

11 May 2015

Charter Communications is in early talks with banks to arrange a debt package worth USD25 billion to USD30 billion, as it pursues a merger with fellow cable operator Time Warner Cable (TWC), people familiar with the matter have informed the Wall Street Journal (WSJ). Charter is said to be pursuing a ‘friendly’ transaction with TWC, after its ‘grossly inadequate’ USD37.3 billion offer was rejected in February last year and its ‘hostile’ takeover approach backfired. A tie-up between the two parties is now firmly back on the table after Comcast’s USD45.2 billion deal to buy TWC unravelled last month. People close to Charter have told the WSJ that the company does not want to make the mistake of a ‘lowball bid’ again.

Meanwhile, the sources add that Charter and TWC have both approached smaller operator Bright House Networks about acquiring the regional cableco. Charter’s previously agreed USD10.4 billion takeover of the company was contingent on the completion of the larger Comcast-TWC merger. Indeed, the expiration of TWC’s right of first offer for Bright House was included among a number of conditions applied to the projected Charter takeover.