Comcast reported on verge of $45BN TWC acquisition

Editor | 13-02-2014

The end game of the saga as to who will buy leading US cableco Time Warner Cable looks in sight with Comcast widely reported as on the verge of snapping up the company in a deal valued at $45.2 billon.

Neither TWC or Comcast has officially confirmed the reports of a deal, but by bringing TWC into its fold Comcast would add 12 million customers to its current video service subscriber base of 22 million, resulting in around 30% of the US pay-TV market. This would be around ten million customers more than second placed pay-TV firm DirecTV even though Comcast would likely divest around three million subscribers.

In addition to the customer base, TWC has the added advantage of serving key markets in particular New York City, and has to date large avoided the costly retrans battles that have dented the US pay-TV arena of late.

The deal would be a bitter blow to number four US cableco Charter Communications which since November 2013 has been trying to flex its backing from major shareholder John Malone to extend its portfolio. Charter’s advances have been rebuffed strongly by TWC’s management with CEO Rob Marcus particularly adamant that Charter’s offers came nowhere near recognising the value of TWC. Indeed in January 2014 TWC condemned Charter’s bids as “grossly inadequate” and a “non-starter” that substantially undervalued the firm. Even as recently as a week ago, one of TWC’s largest investors, T Rowe Price, was urging TWC management to take a second look at Charter.