Mon, Aug. 17, 3:34 PM
- With a rack of 13F filings on the weekend disclosing Q2 holdings, it turns out that Time Warner Cable (TWC +2.1%) was among the top adds by hedge funds and influential investors.
- The company -- in the long process of being acquired by Charter Communications (CHTR +3.6%) -- got new stakes from 7.7% of filers, according to WhaleWisdom.com, which tracks 196 funds. Among those, Soros Fund Management took a 1.45M-share position.
- Only Perrigo (PRGO +0.6%) was added by more filers, at 10.2%. Investors filing that they had opened new buys of TWC came to 16.7M shares added in aggregate.
- On the other hand: TWC was also eliminated by the highest percentage of filers -- 6.6%, getting rid of 8.89M shares. On a net basis, acquisitions of shares still outnumbered dispositions. The second-biggest stock eliminated was Applied Materials (AMAT +2.3%), cut by 6.1% of filers who shed 28.36M shares in aggregate.
- Previously: Buffett 13-F and media: Bought Charter, cut stake in Viacom (Aug. 14 2015)
- More 13F coverage
Wed, Jul. 15, 5:38 PM
Wed, Jul. 15, 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.
Wed, Jul. 8, 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%.
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%.
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
Tue, May 26, 9:14 AM
Tue, May 26, 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
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)
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.
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.
Thu, May 14, 3:13 PM
- Just as with INTX (the former Cable Show) last week, the MoffettNathanson Conference is another chance to get major cable CEOs in the same space and ask them about consolidation.
- Thomas Rutledge of Charter (NASDAQ:CHTR) -- which is discussing up to $30B in financing for a TWC deal -- says "Too much leverage is a bad thing," and that he'd be concerned about a 5x ratio of debt/earnings.
- Time Warner Cable's (TWC +1.5%) Rob Marcus isn't sure consolidation is so inevitable, doubting that "all cable companies will find their way into one of two camps." There are many possible deals where industrial logic doesn't prevail, and social dynamics can get in the way, he says.
- Rutledge on why Charter could deal where Comcast was rebuffed by regulators: "We’re a very different company and a very different circumstance. We’re not vertically integrated."
- Rutledge's concern about leverage puts a spotlight back on Greg Maffei's conference-call commentary that a little help from Charter's friends (by way of investment) could ease the deal. Maffei is chief of Liberty Broadband (NASDAQ:LBRDA), which owns 25% of Charter, and says Liberty's got cash and possible rights offerings along with partners.
Wed, May 6, 1:08 PM
- On stage in general session at the Internet & Television Expo (INTX), panel moderator Julia Boorstin assembled nearly all major cable CEOs and pressed them on hot M&A issues.
- Most were circumspect -- "The world's full of possibilities, but I can't tell you any of them," said Charter (NASDAQ:CHTR) CEO Tom Rutledge -- but James Dolan, CEO of Cablevision (CVC +6%), wasn't, urging market-by-market consolidation instead, starting with CVC's home market of New York City.
- “Consolidation of that marketplace would provide, one, a great deal of ingenuity and much more access to resources for the customers and lower prices,” he said, suggesting specifically that he'd deal with Time Warner Cable (NYSE:TWC), "and Comcast (NASDAQ:CMCSA) and other operators."
- Shares moved up 6% after his comments on indications that Cablevision might sell to a suitable acquirer.
- Previously: WSJ: Charter reaches out to TWC for friendly deal (May. 04 2015)
- Previously: 'As the Cable Turns': Industry deal talk turns to Bright House (Apr. 30 2015)
TWC vs. ETF Alternatives
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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