 The offer is expected to be less than $135 per Time Warner Cable
share and will be a combination of cash and stock, said the
source, who asked not to be named because the matter is not
public.A Charter spokesman declined to comment, while a Time
Warner Cable spokeswoman also declined to comment.
Time Warner Cable shares barely budged Friday afternoon,
closing 35 cents higher, or 0.2 percent, at $131.40.
Any bidder for Time Warner Cable would likely need to offer
at least $150 per share to be considered seriously by the board,
one person familiar with the matter told Reuters last week.
Barclays credit analysts said the lower bid price reported
on Friday, "could extend the process, potentially leading to
either negotiations on deal terms or to a proxy process should
Time Warner Cable reject the overture."
Event-driven
investors have piled into the stock since reports emerged that
Time Warner Cable was a takeover target. Filings show
Paulson & Co owned 1.4 percent of Time Warner Cable shares
as of September 30, while the hedge fund Corvex Management owned
0.06 percent as of that date.
The
Barclays note said that nominations for Time Warner Cable's
board begin on January 15, "so a bid submission prior to this
makes sense."
Charter is much
smaller than Time Warner Cable, but has been trying to line up
financing from several banks, including Goldman Sachs Group Inc,
Bank of America Corp and
Deutsche Bank AG, to swing the transaction, sources said.
Still, some analysts were concerned about the level of debt
the combined entity would carry after a deal.
Charter has a market value of about $13 billion, compared
with Time Warner Cable's $37 billion.
Time Warner Cable,
the No. 2 cable provider in the
United States, is a potential target of several competitors,
which are eager to scoop up the company to boost their
subscriber bases.
Another possible
suitor is
Comcast Corp, which has tapped JPMorgan Chase & Co for
advice on a possible bid.
[to top of second column] |
A formal move by Charter, the No. 4 U.S. provider, could draw
Comcast into the game. So far,
Comcast, the nation's largest cable provider, does not plan to
make a pre-emptive bid for Time Warner Cable, sources told Reuters
last week.
A
Comcast, Time Warner Cable merger could run afoul of antitrust
regulators, analysts said.
Privately held Cox Communications is another potential suitor.
Charter Chief Executive Tom Rutledge said last week during a UBS
conference that the company could pursue major opportunities if it
reached a larger scale.
Cable billionaire John Malone's Liberty Media Corp owns a 27
percent stake in Charter.
Charter shares closed 45 cents, or 0.34 percent, down at $131.54.
Bloomberg earlier reported that Charter was preparing a bid for
under $140 per share.
(Additional reporting by Soyoung Kim
and Nicola Leske in New York; editing by Jeffrey Benkoe and Andre
Grenon)
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