Charter Communications is closing on an agreement to buy Time Warner Cable for a reported $195 per share in a deal said to be worth $55.1 billion, plus assumed debt, Bloomberg and The Wall Street Journal reported today. The announcement could come as soon as Tuesday, the reports said.
Bloomberg, which reported the moves first, said the price would be a mix of $100 per share in cash and the rest in Charter stock. The price is 14% over TWC's closing price on May 22. Charter also had been negotiating a deal to buy Bright House Networks, a smaller cable company which is affiliated with TWC. Combining Charter (about 4 million subscribers) and Time Warner Cable video subscribers together would total roughly 14.8 million, second to Comcast's 22.3 million.
Time Warner Cable declined to comment; a Charter spokesman did not immediately reply to a request for comment.
Charter's big consolidation play was long considered a strong possibility, as Charter, with backing from key shareholder John Malone, had attempted to buy Time Warner Cable in January 2014, only to be turned down for not offering enough. Comcast then stepped in and signed a deal to merge with Time Warner Cable -- a merger that fell apart in April after regulators opposed it as being too big, especially where broadband customers were concerned.
Bloomberg reported that Malone's Liberty Broadband would buy $5 billion in Charter shares at the current price to help fund the deal. The Charter-TWC agreement, unlike the Comcast-TWC merger pact, includes a $2-billion breakup fee, Bloomberg reported. It is possible that Altice, a European telecom firm that has an agreement to buy cable operator Suddenlink, might try to lob a rival bid.
If it happens, the deal would bring Charter's near two-year-long pursuit of TWC full circle. Charter kicked off the industry consolidation frenzy with a $132-per-share unsolicited bid for TWC in 2014. The February 2014 Comcast offer, which TWC accepted, valued TWC at more than $158 per share. Since then, stock prices for Charter and TWC have both risen.
While regulatory approval of a Charter-TWC pairing is not a given, it would far smaller in magnitude than the Comcast-TWC merger. In addition, reports surfaced last week that Federal Communications Commission chairman Tom Wheeler reached out to several cable CEOs, including Rob Marcus of TWC, to assure them that the agency was not against all consolidation efforts.
Mike Farrell contributed to this article.