Charter Communications, Inc. (NASDAQ:CHTR) has reached out to Time Warner Cable Inc (NYSE:TWC) for a possible merger of the two cable giants. The message given out by Charter is clear, they are ready to play nice with Time Warner this time.
John Malone, the chairman of Libert Broadband Corp which is the largest shareholder of Charter called Rob Marcus, the CEO of Time Warner. The call was to tell let Time Warner know of the intention of Charter to pursue a friendly deal. The nice talk this time round is a far cry from last year when Charter tried an unsuccessful hostile takeover of Time Warner.
Charter is making moves after the planned merger of Comcast Corporation (NASDAQ:CMCSA) and Time Warner failed due to regulatory resistance. According to people close to the situation, Chairman of Charter, Eric Zinterhofer, was having dinner with Marcus the evening before Comcast announced the failure of the deal, with Time Warner.
Charter, which is the fourth largest player in the cable market, has been laying the groundwork to make an offer to Time Warner for some time now. Charter CEO, Tom Rutledge and Marcus will be meeting at the National Cable & Telecommunications Association convention where it is expected that they will talk about the deal.
According to people close to Charter, the company is in no mood to try the same mistake of lowballing a bid. The sources also said that Charter would be willing to offer a part of the bid in cash so as to soothe the concerns that its shares are overvalued.
The last time Time Warner was under pressure of being acquired it was losing subscribers. However this time round, the company has reported its first customer growth since 2009. The matters become more complex as both Charter and Time Warner are competing for BrightHouse Networks LLC.
