Comcast Corporation (NASDAQ:CMCSA) has announced that it is stopping its pursuit for the acquisition of Time Warner cable. The final bid had been valued at $45 billion, but analysts believe that it has turned out for the better. The said deal had been known to be facing scrutiny from the FCC and was finally denied the permission to go forward, after being 450 days in the making.
Comcast had been arguing that the deal would not kill any competition, since the two companies operate in very different markets. Unfortunately, that has not been enough to convince the FCC or the judiciary, since both agencies believed that it would give Comcast too much control over an entire industry. Comcast had been hit by stringent net neutrality regulations and a number of users pulling away from the cable-TV. The deal would have stabilized the company again, but most consumers are actually relieved that they deal did not go through.
The analysts have pointed out that despite the failure of the deal; the company’s stock did not fall. The share value is still soaring near its 52-week high, which would indicate that the deal was not an essential ingredient to the company’s expansion plans. Consequently, Comcast can now focus those resources on other smaller potential deals. Comcast CEO, Brian Roberts, in an interview stated: “This allows us to think again.”
If the company is able to learn from its mistakes in the current acquisition, it would now be targeting only those deals that can add value to the shareholders. The CEO also indicated that since the deal is not going forth, it has allowed the company for further stock buybacks. He also hinted that talks on the matter have already been initiated with the board. Time Warner on the other hand, seems to have found another buyer, John Malone, the owner of Charter Communications.
Comcast Corporation (NASDAQ:CMCSA) closed at $59, after gaining 0.2% on April 28. The company has 2.13 billion shares being traded in the market, with a 52-week range of $49.16-$60.85.
