Time Warner's Triple Play Package: The Multi-Bidder Contest For Time Warner Cable
Chris DeMuth Jr. • 16 Comments
Chris DeMuth Jr. • 16 Comments
Jul. 15, 2015, 1:07 PM
- Charter Communications (CHTR +2%) and Time Warner Cable (TWC +1.3%) are on the move this afternoon as Charter draws an important ally in its TWC takeover: Netflix (NFLX -2.2%) is endorsing the deal, telling the FCC of "substantial public interest benefit."
- Charter is offering free interconnection with content/longhaul providers until December 2018, and that's enough to win Netflix's support for the TWC deal -- if Charter keeps that promise.
- "Charter's new peering policy is a welcome and significant departure from the efforts of some ISPs to collect access tolls on the Internet," Netflix's letter reads.
- Netflix's opposition to Comcast's deal for TWC is believed to have held a lot of weight in the breakup of that takeover.
Jul. 9, 2015, 9:00 AM
- Charter Communications (NASDAQ:CHTR) is pursuing a six-part benchmark bond deal for pricing today, in seeking funding for a $56B acquisition of Time Warner Cable (NYSE:TWC).
- The investment-grade bond is part of a package that's likely to take shape over the coming week with high-yield bonds as well as bank debt, in a funding package that could come to $31B.
- Goldman Sachs is global coordinator for the high-grade deal, with BofA Merrill Lynch and Credit Suisse as active books.
- Time Warner Cable is +0.9% premarket.
- Previously: Reuters: Charter may seek multibillion-dollar bond tomorrow for TWC deal (Jul. 08 2015)
- Previously: FCC sets team to review Charter-TWC merger (Jul. 08 2015)
Jul. 8, 2015, 5:06 PM
- Charter Communications (CHTR -1.5%) may be hitting the high-grade debt market tomorrow with a multibillion-dollar M&A bond for its Time Warner Cable (NYSE:TWC) acquisition, Reuters reports.
- That's still dependent on conditions -- which have been shaky recently, with Greece and China weighing heavily on investors' minds.
- "The investment-grade (portion) is expected tomorrow, the high-yield maybe next week," said one of Reuters' buy-side sources of a funding plan that likely comes to more than $30B.
- It will come down to a Thursday morning decision based on the state of world markets.
Jul. 8, 2015, 4:14 PM
- Progress at the FCC -- though maybe not as quick as investors like -- as the agency's chairman, Tom Wheeler, has picked the team to review the Charter-Time Warner Cable merger deal.
- The agency's general counsel, Jonathan Sallet, will head the team, which also includes the same senior economist (William Rogerson) who worked on the Comcast-TWC deal and the AT&T-DirecTV merger. Former Justice Dept. antitrust attorney Owen Kendler will head the transaction review team.
- Today: CHTR -1.5%; TWC -1.4%.
Jul. 7, 2015, 6:45 PM
- A big fiber buildout from AT&T (T +0.5%) is likely to hurt big cable, including Comcast (CMCSA +0.6%), Charter (CHTR +0.5%), Time Warner Cable (TWC +0.7%) and Cablevision (CVC +1%), analyst Craig Moffett says, and it's reminiscent of the mid-2000s.
- Documents from AT&T show that after wrapping its DirecTV merger, it plans to run fiber past the equivalent of 11.7M homes, he notes. The catch is exactly where that fiber runs, and how much that overlaps the cablecos' footprints.
- Cable analysts, he says, will have to "adjust their models to reduce both growth and pricing power assumptions.”
- Moffett estimates that Comcast may have the biggest change in overlap, to 22% from 18%. For Charter, it would go to 12% from 7%. And a Charter-Time Warner Cable combination would go from a 17% overlap to 21%.
Jun. 30, 2015, 11:23 AM
- Cable and wireless firms are on the (legal) clock, as a D.C. appeals court is setting an expedited schedule for them to provide briefs on the set of challenges to FCC net neutrality rules.
- Firms will need to provide their opening briefs (20,000 words or fewer) by July 30, meaning final briefs will be due Oct. 13, and oral argument could begin by year's end.
- The disputes now are largely around Title II reclassification (Internet access as a utility) and interconnection, rather than bans on blocking/throttling or paid prioritization.
- Represented/related companies: VZ, TMUS, S, CMCSA, CHTR, TWC, CVC, CTL, FTR, CCOI, DISH, DTV
Jun. 25, 2015, 1:06 PM
- With regulators including FCC Chairman Tom Wheeler saying that Charter Communications (NASDAQ:CHTR) needs to demonstrate value to consumers in its plan to acquire Time Warner Cable (NYSE:TWC) and Bright House, the company says it'll play nice with net neutrality rules and bring better, cheaper service to a largely expanded footprint.
- Charter says it will provide faster -- and uncapped -- data service for less money than a competitor could. The combined company would have fewer Internet customers than Comcast has now, and fewer cable customers than the combo of AT&T/DirecTV.
- And despite a lawsuit from big cablecos challenging the FCC's new broadband regulatory regime, Charter says it will continue policies of not blocking or throttling traffic or enabling paid prioritization.
- The company also says it will submit interconnection disputes to the FCC, in accordance with the new rules.
- Previously: Bloomberg: Charter seeking $13.8B in debt for TWC purchase (Jun. 18 2015)
Jun. 22, 2015, 8:39 PM
- Following through on an earlier threat, Commercial Network Services has filed its net neutrality complaint against Time Warner Cable (NYSE:TWC), accusing the giant of violating rules against throttling and paid prioritization.
- CNS CEO Barry Bahrami calls it an informal complaint, aimed at interconnection issues. It's a peering complaint that doesn't fit cleanly into the FCC's case-by-case framework and so may serve as a test for how such complaints are resolved.
- For its part, TWC is confident that the FCC would reject any assertion that ""every edge provider around the globe is entitled to enter into a settlement-free peering arrangement."
Jun. 18, 2015, 3:37 PM
- Time Warner Cable (NYSE:TWC) declares $0.75/share quarterly dividend, in line with previous.
- Forward yield 1.68%
- Payable July 22; for shareholders of record July 1; ex-div June 29.
Jun. 18, 2015, 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.
Jun. 17, 2015, 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.
Jun. 16, 2015, 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.
Jun. 15, 2015, 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.
Jun. 12, 2015, 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?
Jun. 11, 2015, 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
Jun. 8, 2015, 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.
Time Warner Cable, Inc. provides video, high-speed data and voice services in the United States. It operates through the following segments: Residential Services, Business Services, and Other Operations segments. The Residential Services segment consist of video, high-speed data and voice... More
Industry: CATV Systems
Country: United States
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