Charter Communications stock was up 9% in early trading Thursday after the Wall Street Journal reported that Verizon Communications chairman and CEO Lowell McAdam has approached Charter Communications concerning a possible purchase of the cable company.
The Journal stressed that talks were preliminary and no formal offer has been made. But Verizon has been under pressure to make a big splash ever since rival telco AT&T announced its $108.7 billion deal to purchase Time Warner Inc. That deal is still pending, but some pundits give it a better than 50-50 chance of regulatory approval.
Charter stock traded as high as $338 per share on Thursday – up 9%, or $27.69 each. The stock has since settled a bit, priced at $331.83 each, up 7% or $21.52 per share at around 9:30 a.m.
Speculation has been high that Verizon was preparing to make a move ever since the New York Post reported that McAdam was telling friends at the recent Consumer Electronics Show in Las Vegas that he would like to buy a cable company. Comcast and Charter were two names that were said to be on McAdam’s radar, but many analysts believed a Comcast buy would never pass muster.
Charter was more believable, but that could be a rather large pill for Verizon to swallow. Some analysts have said that Charter would make a good fit – it has 17 million video customers – and could help Verizon’s mobile video aspirations. As the largest wireless service provider in the country with more than 114 million customers, Verizon could provide Charter with the wireless play it has craved.