Thu, Jun. 18, 10:19 AM
- Charter Communications (CHTR +0.4%) is looking for $13.8B in bridge loans to finance a $55B purchase of Time Warner Cable (TWC +0.2%), Bloomberg reports.
- The package would include a $6B secured loan and two unsecured pieces coming to $7.8B.
- It suggests a progressing timetable for the deal, since investors need to commit by June 24 and the bridge financing would eventually surely be replaced by longer-term debt.
- Credit Suisse, Goldman Sachs, BofA, Deutsche Bank and UBS are arranging the deal.
Wed, Jun. 17, 7:53 PM
- Time Warner Cable (NYSE:TWC) has lifted John Keib into the role of COO and executive VP of its Residential Services business.
- Keib will have responsibility for service delivery as well as customer care, marketing and sales. "Over the past year, we have made a remarkable turnaround in our residential performance," said COO Dinni Jain, crediting Keib.
- He joined Time Warner Cable in 1998 working on marketing for the launch of high-speed Internet in Central New York; previously, he worked at Thomson Multimedia and DirecTV.
Tue, Jun. 16, 7:10 PM
- The FCC's new neutrality rules went into effect Friday, and now Time Warner Cable (NYSE:TWC) will have the dubious distinction of being the first company invoked in a complaint using the rules.
- Commercial Network Services says that it's accusing the cable provider of charging it unreasonable rates to deliver live video streams to TWC customers, including CNS' heavily military audience.
- "This is not traffic we're pushing to Time Warner; this is traffic that their paying Internet access subscribers are asking for from us," says CNS CEO Barry Bahrami.
- The new FCC regulations ban paid prioritization, or so-called "fast lanes" that companies can pay for to give their traffic priority.
- TWC responds that it's willing to enter no-money agreements if partners agree to "settlement-free peering," where they exchange "large amounts of traffic at multiple locations" with the cableco.
- The dispute's been a while in coming; negotiations broke down between CNS and TWC last fall as Bahrami anticipated a rules change that he would take advantage of.
Mon, Jun. 15, 1:55 PM
- AT&T (NYSE:T) has launched its "GigaPower" gigabit-Internet offering in Charlotte, N.C., its 12th market and another one that is targeted by Google for a Fiber expansion.
- The company is pitching a standalone service at its $70/month price (for those submitting to the company's targeted Web ads). It's a Google Fiber-pitched price, compared to $120/month in other markets, but has a data cap of 1 TB before hitting overage charges of $10/50 Gb with a $30/month max.
- Just more data points showing it's good for consumers to be in a competitive city; Time Warner Cable (NYSE:TWC) is working its own "Maxx" digital upgrade in Charlotte, which will bring many of its subscribers there up to 200 Mbps or 300 Mpbs at no additional charge.
Fri, Jun. 12, 5:19 PM
- Today in telecom consolidation speculation: While Dish Network (NASDAQ:DISH) and T-Mobile (NYSE:TMUS) have been talking about a deal with upsides for both (and shareholders have driven DISH up 2.6%, TMUS up 1.8% since word broke June 3), they aren't each other's only option.
- And much of what transpires there depends on T-Mo parent Deutsche Telekom (OTCQX:DTEGY) and what it wants to do with an asset that can command top dollar as perhaps the last attainable big U.S. cell provider.
- “They’re obviously controlled by a German company who has strategic initiatives, both in Europe and the United States, and they may not be in a position where they want to do anything," Dish chief Charlie Ergen said in a Bloomberg TV interview.
- From Dish's perspective: It doesn't need to rush, as it's making free cash flow and has time to sit on its large spectrum stockpiles yet. Ergen could look for a sale to Verizon (NYSE:VZ), or break the spectrum off into a separate company with a sale-leaseback. In any case, many deals that seemed well under way have been kiboshed by the mercurial Ergen.
- Fron T-Mobile's: Deutsche Telekom is reportedly worried about an overvalued Dish and getting too much of that stock. T-Mobile could probably command $49/share in a sale, or a 25% premium, says Gabelli's Sergey Dluzhevskiy. One company that wouldn't blink at that price would be Comcast (NASDAQ:CMCSA) in its own quad-play grab.
- Altice (OTC:ATCEY), which considered a run at Time Warner Cable (NYSE:TWC), could be a long-shot for T-Mobile, or even Charter (NASDAQ:CHTR). And with AT&T expanding in Mexico, how interesting would it be if América Móvil (NYSE:AMX) pumped up its U.S. presence with Big Magenta?
Thu, Jun. 11, 5:18 PM
- With just hours to go before the FCC was to begin enforcement of new net neutrality rules, a federal appeals court has declined to stay them in a blow to telecom firms that hoped to block them while litigation plays out.
- The rules are set to go into effect tomorrow. The plaintiffs argue that they do not object to some of the regulations, like bans on blocking/throttling and paid prioritization, but they are fighting vigorously against Title II classification, which would mean regulating broadband as a tightly controlled telecom service.
- Represented/related companies: VZ, TMUS, S, CMCSA, CHTR, TWC, CVC, CTL, FTR, CCOI, DISH, DTV
- Previous coverage on net neutrality
Mon, Jun. 8, 3:42 AM
- While mergers and acquisitions have accelerated sharply since the financial crisis, the government's pace for reviewing proposed deals is slowing.
- In such deal reviews concluded this year, more than 10 months elapsed, on average, between the transaction's announcement and a yes-or-no decision by the FTC or Justice Department. That's an increase from an average of seven months in recent years.
- Notables: Comcast's (NASDAQ:CMCSA) bid for Time Warner (NYSE:TWC) was pending for 14 months before it was dropped in April. Applied Materials (NASDAQ:AMAT) walked away from its deal to acquire Tokyo Electron (OTCPK:TOELY) 19 months after it was announced, while the FTC spent more than a year examining Sysco's (NYSE:SYY) planned acquisition of U.S. Foods before bringing a lawsuit against it in February.
Fri, Jun. 5, 4:02 PM
- While Charter Communications (NASDAQ:CHTR) is among the many broadband providers are fighting net neutrality provisions in court, the provisions have not affected its network investments, CEO Tom Rutledge told FCC officials this week.
- Rutledge met with the agency's chairman, Tom Wheeler, and other officials to discuss Charter's bid for Time Warner Cable (NYSE:TWC). The FCC's new net neutrality rules are set to go into effect next Friday, and it needs to approve Charter's deal for it to through.
- "The commission’s decision to reclassify broadband Internet access under Title II has not altered Charter’s approach of investing significantly in its network to deliver cutting edge services," Rutledge told Wheeler.
- Charter is in line with other providers in saying that they don't object to the rules banning blocking, throttling and paid prioritization, but that they do reject the idea of reclassifying broadband as a telecom service under Title II.
- More on Charter-TWC
Thu, Jun. 4, 10:47 PM
- After a frustrating 14 months off the air, the Los Angeles Dodgers' cable channel is coming to southern California Charter Communications (NASDAQ:CHTR) customers starting Tuesday.
- SportsNet LA, the channel owned by the Dodgers, has been blocked by every area pay-TV operator except Time Warner Cable (NYSE:TWC) due to some ESPN-level charges, estimated to be as much as $4.90 per subscriber per month. A source says Charter won't charge extra for the channel.
- If that's pleasing to Dodgers fans on Charter, it should bring some goodwill to the company -- now that Charter is pursuing a megadeal with Time Warner Cable, it will need to generate some peace if it's to become the largest TV provider in southern California.
- Charter has 300K customers in the Los Angeles area, and those customers have no overlap with Time Warner cable, so fans in those areas had no way to watch the channel.
- Time Warner Cable may benefit as well: It's been losing more than $100M on a deal it made with the Dodgers, and making it available to Charter subscribers would help stem the losses.
Wed, Jun. 3, 3:16 PM
- Reversing a 22-year-old stance, the FCC has adopted a change where cable providers can raise their rates on basic programming without getting the OK from local governments, an agency source tells Bloomberg.
- It's a move that broadcasters opposed but reportedly passed unanimously as the agency sees national satellite providers offering competition across markets.
- The change isn't a tremendous watershed -- recently, the FCC has been approving nearly all cableco requests to get free of local rate-setting. And Comcast says only about 17% of its subscriber base was subject to local regulation.
- Still, it frees a burden from the cablecos (the burden of proof now lies on localities) while broadcasters worry that their audience could be cut if and when cablecos put broadcast signals into a pricier tier.
- A collection of Senators have written FCC Chairman Tom Wheeler worried that the move would give "unnecessary" benefits to large cablecos when Congress wanted simpler procedure for smaller cablecos.
- Big cable: CMCSA +0.7%; TWC -1%; CHTR -2.8%; CVC -0.6%.
Tue, Jun. 2, 6:46 PM
- Mogul John Malone floated an interesting idea today: Forget Sprint and T-Mobile -- the wireless industry could get its third major alternative to Verizon and AT&T (NYSE:T) with the merger of Charter Communications (CHTR -1.6%) and Time Warner Cable (TWC -0.9%).
- Malone was speaking at his various Liberty companies' annual meetings and noted that in 2012, the cable consortium SpectrumCo got an option to participate in a wireless MVNO service with Verizon (NYSE:VZ) after the wireless firm bought $3.9B in frequencies.
- Charter wasn't in SpectrumCo then, but merger partners TWC and Bright House are. “The concept that Comcast, a greatly enlarged Charter and Cox could together offer a WiFi-optimized connectivity service with a default to a Verizon MVNO is an interesting concept," Malone said.
- He thinks "there's very little dirty underwear" left to be found in a regulatory review of Charter-TWC after the past year's scrutiny.
- Also of interest regarding Charter capex and the dividend: “Everybody's going to say, ‘Oh he’s spending too much capital,’ but I think the end result with be worth it ... To a large degree we’re betting on Tom Rutledge and his team to wake up a sleepy cable company that was treading water in all honesty for a while and trying to satisfy shareholder pressures with buybacks and dividends as opposed to putting the money into having a competitive service offering.”
- Malone company shares today: LMCA -0.1%; LMCB flat; LMCK flat; LTRPA -0.9%; LTRPB +2.2%; QVCA +0.8%; LBRDA +0.1%; OTCQB:LBRDB flat; LBRDK -0.1%.
Mon, Jun. 1, 7:57 PM
- Time Warner Cable (NYSE:TWC) has this going for it: It no longer has the industry's worst customer service, at least according to Consumer Reports.
- That honor goes to smaller player Mediacom, though not by much -- and peers like Charter (NASDAQ:CHTR) and Comcast (NASDAQ:CMCSA) aren't much better than that.
- Armstrong and WideOpenWest were highest rated in all the services they provide, suggesting small really is better when it comes to customer service (though Mediacom has just 890K subscribers against TWC's 12.25M).
- When it comes to TV service, Verizon's FiOS (NYSE:VZ) and satellite providers Dish Network (NASDAQ:DISH) and DirecTV (NASDAQ:DTV) did very well with consumers.
Mon, Jun. 1, 11:24 AM
- Time Warner Cable (NYSE:TWC) says its CFO, Arthur Minson, is leaving the company (effective today) to become president and COO of WeWork, a fast-growing privately held company specializing in the co-working space field.
- "I'm grateful that Artie delayed his decision to leave until he was confident that Time Warner Cable's path forward was established, and in particular for his role in crafting our merger agreement with Charter," says CEO Rob Marcus.
- Taking Minson's place will be acting co-CFOs: William Osbourn Jr., the company's controller and chief accounting officer, and Matthiew Siegel, treasurer.
- The two will keep their existing titles in addition to sharing CFO duties.
Wed, May 27, 10:37 AM
- What seemed to set up as a pitched bidding war for Time Warner Cable (TWC -0.6%) -- between John Malone of Charter Communications (CHTR -1.5%) and "France's Malone," Patrick Drahi of Altice (OTC:ATCEY) -- ended relatively quickly, as Drahi told a parliamentary hearing that Altice wasn't prepared to take on such a big deal so fast.
- Instead, Charter assembled a buyout of TWC and Bright House in a deal valued at $78.7B, including debt.
- "I didn't follow up on the exchanges we had on Time Warner Cable that were mentioned in the media because we were not ready," Drahi said of a deal that would have quadrupled Altice's U.S. employees to nearly 120,000 in a market it was just beginning to enter, with a $9.1B Suddenlink purchase.
- But he says that consolidation is far from over in the U.S.: "Time is on our side ... The two leaders Comcast and Charter will not be able to buy anything else because of their size so we will have an open boulevard ahead of us ... If I buy five small operators, I can be as big as Time Warner Cable."
- Would that mean attention turns to possible target Cablevision (CVC; down 1.8% today, but up 24.4% over the M&A frenzy of the past week)? Cablevision's head-to-head competition with Verizon FiOS is no problem: "It's good actually since it means they know how to compete."
Tue, May 26, 8:37 PM
- With attention already starting to shift to regulatory approval, Charter Communications (CHTR +2.5%) CEO Tom Rutledge says his company's $55B acquisition of Time Warner Cable (TWC +7.3%) will do better with the FCC than Comcast's: Think small.
- "If you look at the ecosystem, who we're playing with in terms of other competitors, they're very large, and we'll still be a relatively small company compared to the large phone companies, compared to Comcast, compared to the wireless companies," he told CNBC.
- Charter's simultaneous deal for Bright House Networks may pump up its own leverage, but it was critical to the TWC bid, says analyst Craig Moffett: Virtually debt-free Bright House and its borrowing capacity likely added as much as $18/share to Charter's $195.71/share offer. Moffett says TWC's handling of Altice's (OTC:ATCEY) counter-play was masterful.
- About that debt: TWC bondholders are still nervous about the combined load (While the firm's 30-year bonds rose 11.7% today, they're still down about 16% from last month). Moody's is likely to push TWC into junk rating territory as debt-to-EBITDA rises from TWC's 2.97 to about 4.79 for the combination. But again, Bright House's addition and "conservative voice on the board" may be mitigating the effects.
- And MoneyBeat's deal tally: Aside from big winner TWC, winners include Goldman Sachs (NYSE:GS), (eventually) rewarded for backing Charter, and UBS, working as sole adviser to Bright House; Losers include Comcast backer JPMorgan Chase (NYSE:JPM), and Deutsche Bank (DB -3.4%) -- a Charter backer back when, but unseen in the new deal.
- Previously: Charter to merge with Time Warner Cable, buy Bright House (May. 26 2015)
Tue, May 26, 9:22 AM
- Time Warner Cable (NYSE:TWC) is up 5% premarket, to $179.75, following confirmation of Charter Communications' (NASDAQ:CHTR) plan to acquire it for roughly $195.71/share. Charter is up 0.3% early.
- The valuation puts TWC's enterprise value at $78.7B and allows for $100 in cash and $95.71 in "New Charter" stock (equal to 0.5409 Charter shares).
- As part of the deal, Charter's acquiring Bright House Networks for $10.4B, finishing a deal it was pursuing during Comcast's aborted pursuit of TWC. That deal's for $2B in cash, $2.5B in convertible preferred partnership units and $5.9B in common partnership units.
- As speculated, Liberty Broadband (NASDAQ:LBRDA) is investing $5B and will own 19% of New Charter as well, while Advance/Newhouse (owners of Bright House) will own 13% of New Charter.
- FCC Chairman Tom Wheeler: “The FCC reviews every merger on its merits and determines whether it would be in the public interest. In applying the public interest test, an absence of harm is not sufficient. The Commission will look to see how American consumers would benefit if the deal were to be approved.”
- Previously: Charter to merge with Time Warner Cable, buy Bright House (May. 26 2015)
- Previously: WSJ: FCC's Wheeler reassuring cable execs mergers can happen (May. 21 2015)
- Previously: Bankers hustling to fund a Charter-TWC merger (May. 15 2015)
- Press release
Time Warner Cable Inc provides video, high-speed data and voice services. The Company also offers security and home management services, networking and transport services and enterprise-class, cloud-enabled hosting, managed applications and services.
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