Reports: Charter In Talks With Banks To Raise $25 Bln For Time Warner Cable Deal

(RTTNews) - Cable operator Charter Communications, Inc. (CHTR), backed by billionaire John Malone's media holding company Liberty Media Corp. (LMCA), is seeking to raise $25 billion in cash funding to make a takeover bid for larger rival Time Warner Cable (TWC), according to media reports on Wednesday.

The funding will enable Charter to include a hefty cash consideration in its bid, but this could deter Time Warner Cable due to the financial risk from the hefty debt financing for the deal.

Charter Communications, the fourth-largest cable operator in the U.S., is said to be in talks with lenders Bank of America Corp. (BAC), Deutsche Bank AG (DB) and Barclays Plc. (BARC.L, BCS) to strike a multi-billion dollar debt financing package.

Sovereign wealth funds and wealthy individuals also could be another source of cash for Charter Communications, which is supported by its largest shareholder Liberty Media in the effort.

Comcast Corp. (CMCSA, CMCSK), the largest cable operator in the U.S., is also said to be considering a bid for Time Warner Cable, either on its own or backing a bid by Charter.

Comcast and Charter Communications have also reportedly discussed a joint bid and divided the proposed assets of Time Warner Cable between them.

Meanwhile, privately-held Cox Communications, the third-largest cable operator in the U.S., is also reportedly in the fray and is considering a bid for its larger rival Time Warner Cable either on its own or by participating in a joint bid with other competitors. Cox Communications is the latest to join the growing list of prospective bidders.

However, Charter Communications was the first company to have reportedly made a bid for Time Warner Cable and have been pursuing the deal for more that five months, but have been rebuffed.

Time Warner Cable, the second-largest cable operator in the U.S., has a market capitalization of more than $38 billion.

One potential complication for buyers is that Time Warner Cable is looking for a premium to its share price, which has gained about 43 percent from $95.68 on June 14, when reports first emerged that the company was a takeover target.

The cable television industry has been losing television subscribers to satellite operators and phone companies, and is facing new challenges from online video. Cable companies could also be pushing for a consolidation in order to cut costs amid rising programming costs.

TWC closed Wednesday's regular trading session at $136.80, up $0.24 or 0.18% on a volume of 3.27 million shares, while CHTR closed at $134.98, down $1.14 or 0.84% on a volume of 1.77 million shares.