Reports: Cox Communications Mulls Bid For Time Warner Cable

(RTTNews) - Cable operator Cox Communications Inc. is considering making a bid for its larger rival Time Warner Cable Inc. (TWC) either by acquiring the company on its own or by participating in a joint bid with other competitors, according to media reports on Tuesday. Cox Communications will thus join the growing list of prospective bidders for the second-largest cable operator in the U.S.

Atlanta-based Cox Communications is the third-largest cable operator in the U.S., behind Comcast Corp. (CMCSA, CMCSK) and Time Warner Cable.

Charter Communications, Inc. (CHTR), backed by billionaire John Malone's media holding company Liberty Media Corp. (LMCA), was the first company to have reportedly made a bid for Time Warner Cable.

The fourth-largest cable operator in the U.S. has reportedly held talks with lenders Bank of America Corp. (BAC), Deutsche Bank AG (DB) and Barclays plc (BARC.L, BCS) in an effort to raise cash to make a bid for Time Warner Cable.

Time Warner Cable has a market capitalization of more than $38 billion and Charter is said to have discussed a multi-billion dollar debt package with these banks.

Meanwhile, Comcast 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 reportedly discussed a joint bid and divide the assets of Time Warner Cable between them.

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.

However, one potential complication for buyers is that Time Warner Cable is looking for a premium to its share price, which has gained about 42 percent since mid-June, when reports first emerged that the company was a takeover target.

TWC closed Tuesday's trading at $136.56, up $4.54 or 3.44 percent on a volume of 6.86 million shares. In after-hours, the stock further gained $0.12 or 0.09 percent to $136.68.