Charter To Buy Bright House Networks In $10.4 Bln Deal

(RTTNews) - Cable television operator Charter Communications, Inc. (CHTR) agreed Tuesday to acquire smaller peer Bright House Networks LLC in a cash-and-stock deal valued at $10.4 billion that will help expand user base, primarily in Florida. The combined entity will do business through a partnership called New Charter.

"Bright House Networks provides Charter with important operating, financial and tax benefits, as well as strategic flexibility. Bright House has built outstanding cable systems in attractive markets that are either complete, or contiguous with the New Charter footprint. This acquisition enhances our scale, and solidifies New Charter as the second largest cable operator in the US," Charter President and CEO Tom Rutledge said.

Bright House, owned by Advance/Newhouse Partnership, is the sixth largest cable operator in the U.S., and serves about 2 million video customers in central Florida including Orlando and Tampa Bay, as well as Alabama, Indiana, Michigan, and California.

Following the closure of the deal, the combined partnership entity will be owned 73.7 percent by Charter, and 26.3 percent by Advance/Newhouse. New Charter will become the new publicly traded parent company of Charter.

The total consideration will be paid through a combination of common and convertible preferred units in the new Partnership, in addition to $2 billion in cash. The partnership units owned by Advance/Newhouse will be exchangeable for common shares of New Charter.

The closure of the deal is subject to the $45.2 billion all-stock friendly merger deal between Comcast Corp. (CMSCA) and Time Warner Cable, Inc. (TWC) being approved by U.S. regulators.

It is also subject to the expiration of Time Warner's right of first offer for Bright House, and regulatory approval.

"Tom managed cable systems that were part of our partnership with Time Warner Cable prior to the formation of Bright House Networks. We think the combination with Charter gives our employees, our customers and Advance/Newhouse the strongest prospects for the future," Bright House CEO Steven Miron stated.

At the close of the deal, New Charter's Board of Directors will consist of 13 directors, including three directors designated by Advance/Newhouse and three directors designated by Liberty Broadband Corp. (LBRDA, LBRDK), which is currently Charter's largest stockholder.

In Tuesday's regular trading session, CHTR is currently trading at $195.35, up $11.96 or 6.52% on a volume of 0.93 million shares, after hitting a 52-week high of $199.00 in early deals.