UPDATE: John Malone’s Charter Communications has entered into an agreement purchase Time Warner Cable (TWC) in a deal that values the latter at $78.7 billion.
In addition, Charter and Advance/Newhouse Partnership, a parent of Bright House Networks,have announced that the two companies have amended the agreement which the two parties signed and announced on March 31 whereby Charter will acquire Bright House Networks for $10.4 billion.
That agreement, as amended, 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%.
Meanwhile, Liberty Broadband Corporation (“Liberty Broadband”) 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.
Following the close of both the Charter-Time Warner Cable and the Charter-Advance/Newhouse transactions, and depending on the outcome of the cash election feature offered in the Charter-Time Warner Cable transaction, 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.
The combination of Charter, Time Warner Cable and Bright House will create a leading broadband services and technology company serving 23.9 million customers in 41 US states.
The Time Warner deal,through Malone’s Liberty Broadband Corp, follows an earlier approach by Patrick Drahi, the French billionaire, whose Altice vehicle owns the French cable network Numericable.
In April, Comcast withdrew its $45.2 billion offer for TWC after failing to convince the FCC and other regulators. This cleared the way for Charter to re-enter the bidding process having been rebuffed by the cable giant early in 2014.
In purchasing TWC, Charter would at a stroke quadruple its subscriber base to close to 17 million basic cable customers, second in the market to Comcast’s 22 million.
Drahi has only just entered the US market after purchasing a 70% stake in the US cable operator Suddenlink from its existing shareholders BC Partners, CPP Investment Board and Suddenlink management.
