Charter Communications To Merge With Time Warner Cable In $78.7 Bln Deal

(RTTNews) - Charter Communications, Inc. (CHTR) and Time Warner Cable Inc. (TWC) announced they have entered into a definitive agreement for Charter to merge with Time Warner Cable. The deal values Time Warner Cable at $78.7 billion. Charter will provide $100.00 in cash and shares of a new public parent company, or New Charter, equivalent to 0.5409 shares of CHTR for each Time Warner Cable share outstanding. The deal values each Time Warner Cable share at approximately $195.71 based on Charter's market closing price on May 20.

Charter will provide an election option for each Time Warner Cable stockholder, other than Liberty Broadband Corporation or Liberty Interactive Corporation, who will receive all stock, to receive $115.00 of cash and New Charter shares equivalent to 0.4562 shares of CHTR for each Time Warner Cable share they own.

Advance/Newhouse Partnership, a parent of Bright House Networks, LLC, and Charter announced that the two companies have amended the agreement which the two parties announced on March 31, 2015, whereby Charter will acquire Bright House Networks for $10.4 billion. The amended agreement provides for Charter and Advance/Newhouse to form a new partnership of which New Charter will own between approximately 86% and 87% and of which Advance/Newhouse will own between approximately 13% and 14%, depending on the Time Warner Cable shareholders' cash election option.

Charter also announced that Liberty Broadband Corporation has agreed to purchase, upon closing of the Time Warner Cable transaction, $4.3 billion of newly issued shares of New Charter at a price equivalent to $176.95 per Charter share. Liberty Broadband will also purchase, upon closing of the Charter-Advance/Newhouse transaction, $700 million of newly issued Charter shares at a price equivalent to $173.00 per Charter share.

Following the close of these transactions, Time Warner Cable shareholders, excluding Liberty Broadband and its affiliates, are expected to own between approximately 40% and 44%1 of New Charter, and Advance/Newhouse is expected to own between approximately 13% and 14% of New Charter. Liberty Broadband is expected to own between approximately 19% and 20% of New Charter.