Time Warner slams Charter's attempt to ‘steal the company’

Editor | 16-01-2014

In the latest twist in the attempt by Charter Communications to buy No 2 US MSO Time Warner Cable, TWC has condemned the latest bid as no less than an attempt to ‘steal’ the company.

On 13 January, Charter made a $61.3 billion offer which was described by TWC CEO Rob Marcus as a “grossly inadequate proposal” and “non-starter” that substantially undervalued his firm.

In an open letter to Charter chief executive Thomas Rutledge, Marcus further criticised TWC for ignoring his company’s overture and instead making “a verbal offer at an unrealistic price expectation”.

Undeterred, Charter followed this rebuff with a conference call to resolve the issues but this received a stinging rebuff from TWC who in a statement said: "There was nothing in Charter’s presentation and call today that changes the fact that its proposal is grossly inadequate. We have engaged with Charter, but Charter is not prepared to pay for a one-of-a-kind asset that Tom Rutledge referred to today as the biggest and best M&A option available. We are confident in our standalone plan and we are not going to let Charter steal the company.”

Charter has being trying to seal a deal with TWC for more than six months and had hit a wall until December 2013 when the companies’ respective CEOs and CFOs met to walk through Charter's plan including the structure, financing, tax and cash flow aspects of a transaction. The proposal would create a cable company serving 20 million customers in 38 states, giving Charter significant leverage in terms of negotiating programming costs with content companies — a primary driver for future consolidation, analysts say. The deal would be highly leveraged: No 4 MSO Charter has just 4.3 million subscribers with a market cap that is just a third the size of TWC's.