WSJ: Charter Reaches Out To Time Warner Cable On Friendly Merger Deal

(RTTNews) - Charter Communications, Inc. (CHTR) has reached out to Time Warner Cable Inc. (TWC) for talks about a possible merger of the two cable operators, the Wall Street Journal reported Sunday, citing people familiar with the matter.

According to the WSJ report, John Malone, the chairman of Charter's largest shareholder, Liberty Broadband Corp. (LBRDA, LBRDK), called Time Warner Cable's CEO Rob Marcus in recent days to express Charter's interest in pursuing friendly deal talks. This is in contrast to the unsuccessful hostile takeover bid by Charter, the fourth-largest cable operator in the U.S, for Time Warner Cable last year.

Malone's call to Marcus came after Comcast Corp. (CMCSA, CMCSK) said recently that its merger with Time Warner Cable or TWC as well as its deal with smaller rival Charter Communications have been terminated amid regulatory resistance.

Meanwhile, the WSJ reported that Charter and TWC are already jockeying for advantage by courting Bright House Networks LLC, a smaller cable operator that serves about two million customers.

The WSJ reported last Thursday that Charter and TWC had separately held preliminary talks with Bright House about an acquisition. A deal to acquire Bright House would reportedly place both Charter and TWC in a stronger bargaining position with the other company.

However, it is not clear how regulators will view the three-way deal to create another cable giant, after they resisted the Comcast-TWC merger.

Comcast had agreed in February 2014 to acquire TWC for $45.2 billion in an all-stock friendly merger deal. The deal was originally expected to close in early 2015. Comcast trumped a takeover attempt made for TWC earlier by Charter Communications.

Comcast had also struck a deal with Charter to divest 4 million managed subscribers in order to reduce competitive concerns over its merger with TWC. Comcast was also ready to divest some more of its assets to gain antitrust approval for the deal.

However, as expected, regulators dug into them and kept delaying the anti-trust reviews amid intense pressure and insurmountable scrutiny, particularly by the Federal Communications Commission or FCC, the antitrust watchdog.

CHTR closed Friday's trading at $187.43, up $0.38 or 0.20 percent on a volume of 1.66 million shares. TWC closed Friday's trading at $157.25, up $1.73 or 1.11 on a volume of 2.36 million shares.