Cable Operators

Maffei: Charter Deal Could Lead To Other Cable Buys

Liberty CEO Tells CNBC Charter Is “Rare” Opportunity 3/19/2013 1:15 PM Eastern

Liberty Media CEO Greg Maffei said the media giant’s recent deal to acquire a 27% interest in Charter Communications was a “rare” opportunity to secure a significant chunk of a major cable operator, hinting that the deal could lead to other cable deals if opportunities arise.

Liberty agreed Tuesday to acquire 26.9 million shares of Charter stock and 1.1 million warrants from three major shareholders for about $2.617 billion.  The deal is expected to close in the first half of the second quarter.

In an interview with CNBC’s “Squawk Box,” Tuesday,  Maffei said that Liberty is impressed with Charter’s management team, led by CEO Tom Rutledge and praised its business plan.

“If opportunities arise for incremental acquisition, that’s only a further benefit,” Maffei told CNBC.

"It's rare when you have an opportunity to buy a significant stake and have the influence that Liberty would like to have and will have at Charter," Maffei continued.

Some analysts have suggested that Charter could be used as a vehicle to consolidate smaller, independent cable operators, adding that Liberty could increase its stake in the nation’s fourth largest MSO down the road.

“We foresee plenty of scale opportunities for geographically-contiguous system swaps and acquisitions over time, given the broad Charter footprint,” ISI Group media analysts Vijay Jayant and David Joyce wrote in a recent report.

Maffei told CNBC that Liberty has no current plans to increase its stake in Charter. According to the deal, Liberty agreed not to increase its holdings above 35% by January 2016 and capped its holdings at 39.99% beyond that date.

“The potential is there and we’ll see how prospects go, but we have no current plans,” Maffei told CNBC of increasing its Charter interest. “We’re very happy with our 27%.”   

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