Charter nominates TWC replacement board in hostile takeover effort

Michelle Clancy | 12-02-2014

Charter Communications is continuing with its attempt to execute a hostile takeover of the USA's second multi-system operator Time Warner Cable (TWC), nominating 13 candidates to take over TWC's board.

All members of the company's board of directors are up for re-election at the annual shareholder's meeting this spring and Charter has offered its own slate of nominees to shareholders for direct consideration. In the meantime, it has been presenting its case directly to TWC shareholders for taking over the much larger company, some of whom seem amenable to the idea, after TWC rejected its US$132.50 per share offer. TWC has said that it would only consider a bid of $160 per share, including $100 per share paid in cash — something that Charter says it is not prepared to offer given TWC's ongoing subscriber losses and what it called a "failed operational strategy".

The nominees are: former Time Warner Cable CTO Jim Chiddix; former Charter Communications and Adelphia Communications CTO Marwan Fawaz; former Virgin Media CEO Eamonn O'Hare; former Cablecom CEO Bruno Claude; Harvard Law School lecturer Isaac Core; former Martha Stewart Living Omnimedia CEO Lisa Gersh; former Morgan Stanley executive Dexter Goei; Ally Financial chairman Fritz Hobbs; DelMorgan & Co CEO Neil Morganbesser; former Anheuser-Busch president David Peacock; Oakridge Consulting president Michael Salvati; The Hain Celestial Group president Irwin Simon; and Avalon Capital Partners president John Welsh.

"It is clear from our meetings with Time Warner Cable shareholders that there is an overwhelming desire to combine these two companies to increase Time Warner Cable's competitiveness, grow market share and create shareholder value," Charter CEO Tom Rutledge said in a statement. "Our purpose in this proxy contest is to enable shareholders of TWC to raise their voices and to provide a very capable board who will hear them," he added.

Unsurprisingly, TWC CEO Rob Marcus lost no time in denouncing the development: "It is clear that Charter is nominating a slate of directors for the sole purpose of pressuring our board into accepting the same lowball offer that it previously considered and unanimously rejected. Our board remains focused on maximising shareholder value. We are confident in our strategic plan, which was detailed publicly on 30January, and we are not going to let Charter steal the company."