Charter may raise Time Warner offer by $10 per share

Michelle Clancy | 04-02-2014

Time Warner Cable may be looking for $160 per share from Charter Communications for an acquisition to go through, but Charter's not quite there yet. However, it is reportedly considering upping its existing offer of $132.50 per share to the "low $140s".

CEO Rob Marcus made it clear on the MSO's Q4 earnings call that the No 2 cable MSO would need $160 per share, $100 per share of it paid in cash, for TWC to even begin to entertain a takeover offer.

Charter, for its part, has cited TWC's recent subscriber losses as signs of a "failed operational strategy," thus attempting to justify the lower number, which values TWC at $37.3 billion based on shares outstanding.

Reuters reports that Charter could up its bid to $142.50 or so within the next two weeks, even as it preps for a shareholder proxy battle to replace TWC's board of directors. The one-month window to nominate a new slate for the board expires in mid-February for the annual shareholder meeting expected in May.

"We would expect Charter to move forward with plans for a proxy fight but believe a new, higher bid may come given the support it would have from Time Warner Cable shareholders and our modelling that suggests ample value for both sides," UBS analyst John Hodulik said in a research note.