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Time Warner Cable Inc. (TWC)

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  • Today, 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."
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  • Yesterday, 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)
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  • Yesterday, 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
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  • Yesterday, 9:14 AM
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  • Yesterday, 6:22 AM
    • Charter Communications (NASDAQ:CHTR) has agreed to buy Time Warner Cable (NYSE:TWC) for $55B, finally clinching an agreement after its early 2014 bid was rejected and Comcast abandoned its offer.
    • Charter will pay $195.71 a share - 14% above Time Warner Cable's May 22 close - with $100 in cash and the remainder in its own stock, according to a statement Tuesday.
    • Bright House Networks, a smaller cable company Charter previously agreed to buy, will also be merged into the combined entity.
    • TWC +9.1% premarket
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  • Mon, May 25, 12:43 PM
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  • Fri, May 22, 11:12 AM
    • France's Altice (OTC:ATCEY) is advancing its ambitions for a purchase of Time Warner Cable (NYSE:TWC) by talking with banks about raising debt for a bid for the highly-targeted cableco, Reuters reports.
    • The company is talking with JPMorgan Chase, Nomura, BNP Paribas, SocGen, Barclays and RBC among others.
    • If Altice were to go forward, it would try not to burden its balance sheet unnecessarily, sources tell Reuters, and financing could include a high-yield bond as well as loans.
    • It's not a light concern. With Altice's agreement to buy Suddenlink for $9.1B, not to mention the recent purchase of SFR, the company is taking on debt in a hurry. The Suddenlink deal is expected to be financed in dollar-denominated debt that would be ringfenced at Suddenlink: "It is a purely US business so it would make sense to raise the debt in dollars," says a banker.
    • Altice says total leverage, including full synergies, will be 6.1x 2014 EBITDA.
    • TWC, meanwhile, seems to be moving on the news of each day: With chatter that a bid could come in at $170/share, TWC is up 2.7%, to $170.
    • Previously: Altice enters the U.S. with Suddenlink stake (May. 20 2015)
    • Previously: Cable M&A: Altice reportedly looking at TWC as well as Suddenlink (May. 19 2015)
    • Previously: Vivendi chooses to sell SFR to Altice in €17B+ deal (Apr. 06 2014)
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  • Thu, May 21, 8:07 PM
    • Now up in As the Cable Turns: French billionaire and controlling shareholder of Altice (OTC:ATCEY) Patrick Drahi met in New York Wednesday with Time Warner Cable (NYSE:TWC) CEO Rob Marcus to talk about a cash-and-stock takeover, The Wall Street Journal is saying.
    • Meantime, with Charter (NASDAQ:CHTR) also in active talks about a takeover, TWC's price tag (at least informally) seems to be going up, well north of Charter's 2014 bid of $132.50/share and Comcast's bid of roughly $158.82.
    • TWC closed down 0.6% today at $165.52 and in later after-hours trading was down 5%, to $157.33.
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  • Thu, May 21, 6:04 PM
    • Giving some key hope to suitors for Time Warner Cable not named Comcast (NASDAQ:CMCSA), FCC Chairman Tom Wheeler placed individual calls to various cable execs -- including TWC's Rob Marcus and Charter's Tom Rutledge -- to say the agency's not against any and all deals just because it kiboshed Comcast's, The Wall Street Journal is reporting.
    • Wheeler reportedly wanted to clarify the FCC stance amid industry confusion about just how much consolidation it would support, and said that each potential deal would be judged on its merits.
    • Wheeler did express that he's like to see more competition from companies that traditionally haven't battled in the same geographies, and encouraged the prospect of cablecos "overbuilding" into each other's service areas, according to the WSJ.
    • With TWC looking like the key catch, its stock has risen 8.9% over the past month.
    • Consolidation prospects: TWC, CHTR, OTC:ATCEY, CVC, CTL, FTR, WIN, FRP, CBB
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  • Thu, May 21, 9:17 AM
    • New additions to Goldman's hedge fund hotels - 50 stocks which most frequently appear among the largest ten holdings of hedge funds: AerCap (NYSE:AER), Assured Guaranty (NYSE:AGO), Baker Hughes (NYSE:BHI), Citizens Financial (NYSE:CFG), Colony Capital (NYSE:CLNY), Dresser-Rand (NYSE:DRC), Family Dollar (NYSE:FDO), Hospira (NYSE:HSP), Netflix (NASDAQ:NFLX), NXP Semi (NASDAQ:NXPI), Pharmacyclics (NASDAQ:PCYC), Visa (NYSE:V), and Walgreens (NASDAQ:WBA).
    • Since 2001, the basket has outperformed the S&P 500 in 66% of quarters by an average of 73 basis points. YTD, however, it has underperformed by nine bps. Goldman notes the current basket overweights Consumer Discretionary (22%) and underweights Consumer Staples (2%).
    • Looking at the full list, Actavis (NYSE:ACT) leads the way, with 77 funds naming the stock as a top 10 holding. Next up is Apple (NASDAQ:AAPL) with 69, then Facebook (NASDAQ:FB) at 42. For the entire list of 50, the average is 26 funds making a stock a top 10 holding.
    • The rest in order: Valeant (NYSE:VRX), Microsoft (NASDAQ:MSFT), DirecTV (NASDAQ:DTV), Citigroup (NYSE:C), Time Warner (NYSE:TWC), Delta (NYSE:DAL), Cheneire (NYSEMKT:LNG), Yahoo (NASDAQ:YHOO), Liberty Global (NASDAQ:LBTYK), AIG, SunEdison (NYSE:SUNE), Air Products (NYSE:APD), Amazon (NASDAQ:AMZN), GM, BofA (NYSE:BAC), JPMorgan (NYSE:JPM), Macquarie Infrastructure (NYSE:MIC), American Airlines (NASDAQ:AAL), Charter Communications (NASDAQ:CHTR), Google (GOOG, GOOGL), Ally Financial (NYSE:ALLY), NorthStar Realty (NYSE:NRF), Priceline (NASDAQ:PCLN), eBay (NASDAQ:EBAY), MasterCard (NYSE:MA), Alibaba (NYSE:BABA), Micron (NASDAQ:MU), Williams (NYSE:WMB), Gilead (NASDAQ:GILD), Berkshire Hathaway (BRK.A, BRK.B), Dolar General (NYSE:DG), NorthStar Asset (NYSE:NSAM), Brookdale Senior (NYSE:BKD), DISH Network (NASDAQ:DISH).
    • See also: Goldman updates list of hedge funds most-shorted stocks (May 21)
    | 19 Comments
  • Wed, May 20, 10:30 AM
    • Cablevision Systems (NYSE:CVC) has climbed the mountain coming out of today's open, up 11.3% following news of Altice's plans for purchase of control of cable peer Suddenlink.
    • With a $6.4B market cap and 2.8M subscribers, Cablevision is considered an acquisition target in an industry that is churning with rapid-consolidation pressures. Charter Communications is circling Bright House Networks as a precursor to a new bid for Time Warner Cable (TWC +3.7%), and Altice may be a player for TWC as well after its Suddenlink stake.
    • Comcast, for its part, ran into regulatory objections with its bid for TWC and, with 22.4M subscribers, isn't necessarily safe from a potential forced breakup.
    • At the Internet & Television Expo in early May, Cablevision CEO James Dolan suggested openness to tie-ups, encouraging market-by-market consolidation starting with its home market of New York City.
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  • Wed, May 20, 3:57 AM
    • Altice (OTC:ATCEY) has agreed to buy a controlling stake in U.S. cable company Suddenlink in a deal valued at $9.1B, boosting the fast-growing European group into one of the world's largest communications markets.
    • Altice will acquire 70% of Suddenlink from the company’s owners, P-E firm BC Partners and CPP Investment Board.
    • Yesterday, WSJ reported that Altice also has its eyes Time Warner Cable (NYSE:TWC) and has held initial talks with the company about a potential deal.
    • Previously: Cable M&A: Altice reportedly looking at TWC as well as Suddenlink (May. 19 2015)
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  • Tue, May 19, 9:10 PM
    • France's Altice (OTC:ATCEY) isn't only looking at a multibillion-dollar buy of U.S. cableco Suddenlink -- it's also checking out Time Warner Cable (NYSE:TWC) and has had initial talks with them about a deal.
    • It's an uptick in high-stakes negotiations for the future cable/broadband industry, and those negotiations could pit billionaire Altice founder Patrick Drahi against another titan, John Malone, who would back Charter (NASDAQ:CHTR) in its own deal for TWC.
    • Similar to Charter's approach -- where a deal for Bright House Networks would precede a TWC purchase -- Altice's deal for Suddenlink would be a precursor to its own bid.
    • Time Warner Cable had moved up 1.3% in after-hours action, putting it just above $160/share -- above the $132.50/share that Charter bid for the company in early 2014, and the roughly $158.82 that Comcast (NASDAQ:CMCSA) was offering in its failed bid.
    • Previously: WSJ: Altice in talks for $8B-$10B buy of Suddenlink (May. 19 2015)
    • Previously: Reuters: Charter's $10.4B Bright House buy on track (May. 18 2015)
    • Previously: WSJ: Charter seeking up to $30B in debt for a TWC deal (May. 09 2015)
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  • Mon, May 18, 3:06 PM
    • Just a little over a week after reports that Bright House Networks was out of any deal to be acquired by Charter (NASDAQ:CHTR) -- which was originally contingent on a successful Comcast-TWC tie-up -- Charter and Bright House say their $10.4B deal is on track.
    • Charter and Bright House owner Advance Newhouse have extended their negotiating period for another 30 days in order to complete the deal.
    • Is it a precursor to a friendly Time Warner Cable (TWC +0.9%) marriage? Bright House has a tight operating relationship with TWC, and those close to Charter say that acquiring both Bright House and TWC is entirely possible, despite concerns about the leverage required to make it happen.
    | 1 Comment
  • Fri, May 15, 7:07 PM
    • Broadband subscribership grew by nearly 1.2M in Q1, according to a Leichtman Research Group report examining the top 17 ISPs.
    • Cable made up 86% of that growth; Comcast (NASDAQ:CMCSA), the nation's largest MVPD, added 407K users by itself. It's the first quarter since Q1 2008 where cable logged more than 1M net broadband adds, says Bruce Leichtman.
    • Overall, leading ISPs now boast 88.5M subscribers, cable with 53M of those.
    • Not coincidentally, cable's recently had momentum on the network-investment front, with firms like Comcast and CenturyLink (NYSE:CTL) investing in their gigabit broadband installations.
    • Related companies: VZ, T, CMCSA, CHTR, TWC, CVC, CTL, FTR, WIN, FRP, CBB
    • Previously: A hint for Comcast's 2-Gig pricing? (May. 11 2015)
    • Previously: Comcast call: Now more broadband company than cableco (May. 04 2015)
    | 4 Comments
  • Fri, May 15, 2:42 PM
    • Any talks between Charter Communications (NASDAQ:CHTR) and Time Warner Cable (NYSE:TWC) about a merger may be up in the air, but bankers won't be the bottleneck, as they're ready to talk about $25B or even more to make it happen.
    • Following previous reports that Charter could go for $25B-$30B in debt, the cableco is talking with the same four bankers that committed $24B to Charter's early-2014 bid: Bank of America Merrill Lynch (NYSE:BAC), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB) and Goldman Sachs (NYSE:GS).
    • As one banker noted, "it should be quick to move to next steps, as the banks know the company pretty well," and said the package should end up as two-thirds bonds.
    • Aside from any regulatory issues, leverage seems to be foremost on the mind of dealmakers (and investors). Liberty Broadband's (NASDAQ:LBRDA) Greg Maffei has gone public with the notion that Liberty could raise capital through rights offerings or tap $700M in cash to help with funding while maintaining its 25% stake in Charter.
    • Other banks could join in too, which could make such a deal one of the largest junk bonds ever. Time Warner's on the edge of junk status, rated BBB/Baa2 by S&P and Moody's.
    | 2 Comments
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Company Description
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.
Sector: Services
Industry: CATV Systems
Country: United States