By Shalini Ramachandran
Charter Communications' biggest shareholder, Liberty Media
Corp., isn't taking "any option off the table" regarding its
interest in Time Warner Cable, Liberty Chief Executive Greg Maffei
told analysts on Friday.
Mr. Maffei was responding to a question whether Charter could
counter-bid for TWC, which two weeks ago agreed to be acquired by
Comcast in a deal then valued at $45.2 billion. That deal appeared
to end Charter's months-long pursuit of Time Warner Cable, during
which TWC had repeatedly rejected Charter's approaches.
Charter has still not withdrawn a slate of 13 nominees that it
had proposed for election to Time Warner Cable's board at its
annual meeting this spring. Even so, a person familiar with the
situation said this week that a counteroffer from Charter was not
being prepared.
Mr. Maffei said Liberty will "watch with interest" how Comcast
Corp's agreed purchase of Time Warner Cable proceeds, including
"whether there are divestitures, whether that deal ultimately gets
completed and what it all means."
Comcast's bid faces regulatory scrutiny, as it combines the no.
1 and no. 2 cable operators. Still, Mr. Maffei said he assumed
regulators will approve it "under some set of conditions."
Comcast has said it is willing divest about three million
subscribers. Charter is seen as a possible bidder for those
subscribers.
Comcast's offer was valued at $158.82 a share when it was
announced, based on Comcast's closing price the day before. Since
then, however, Comcast's stock price has fallen 6%, bringing down
the value of the all stock bid to a little above $149 a share. Time
Warner Cable shares were up 1.9% to $141.29 in early Friday
afternoon trading.
Mr. Maffei noted the decline in the value of the deal. "We'll
see what actually gets paid," he said.
Mr. Maffei said Liberty and Charter will do what's in the best
interest of their shareholders, which could include keeping
flexibility for other cable acquisitions, including divestitures of
cable systems out of the Comcast-TWC deal or the event that the
mega cable deal "is not able to be completed."
He noted that during the whole courtship of Time Warner Cable,
many investors expressed interested in backing cable consolidation
alongside Liberty and Charter. "I suspect if a need arises for
additional equity for a cable consolidation play, we'll see a lot
of interest."
Liberty Media, meanwhile, posted an operating profit of $189
million, compared with an operating loss of $60 million in the
year-earlier period. Revenue rose to $1 billion, slightly below
analysts' expectations of $1.03 billion.
Liberty Media in January offered to buy the roughly 48% of
Sirius XM Holdings it doesn't already own in an all-stock deal that
initially valued the satellite-radio operator at about $3.68 a
share. Sirius, in turn, formed a special committee to consider the
offer.
"We believe this combination will simplify the capital
structure, further align management and provide ultimate strategic
and financial flexibility," Mr. Maffei said Friday. "We are
responding to requests for information from the representatives of
SiriusXM's special committee."
Dana Cimilluca and Michael Calia contributed to this
article.
Write to Shalini Ramachandran at
shalini.ramachandran@wsj.com
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