Malone-backed Charter swoops for Time Warner

Michael Bow
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John Malone: The billionaire executive has helped engineer a $195 a share stock and cash deal for Time Warner (Source: Getty)
John Malone-backed cable group Charter is poised to win the race to snap up media giant Time Warner in a $55.1bn deal to create America’s second largest cable and broadcasting company.

The billionaire executive, who chairs Liberty Global, has helped engineer a $195 a share stock and cash deal for Time Warner.

The takeover, which could be announced as soon as today, will see Charter – 25 per cent owned by Malone’s Liberty Media group – combine with Time Warner and cable provider Bright House Networks, to create a challenger to industry leader Comcast.

Terms of the deal include a option of $100 in cash and $95 in Charter shares, or $115 in cash and $80 in shares. Shareholders will need to approve any deal.

A $2bn break fee has also been included, a sign of the wariness that both sides exhibit over competition concerns from US regulators.

An agreement would end Malone’s long running pursuit of Time Warner, which has been a long-standing takeover target for media companies.

Time Warner struck a deal with Comcast in April 2014 – beating out Charter – but US competition authorities indicated they would not back a deal, ending the chances of a tie-up.

French cable firm Altice, guided by billionaire rival Patrick Drahi, has also made a move for Time Warner and had built a substantial warchest to fund to takeover.

The company could still move to mount a counterbid against Charter.

Charter’s bid of $195 a share is 14 per cent higher than Time Warner’s closing price on Friday night. US markets were closed yesterday for a public holiday.

Terms of the deal were first reported by Bloomberg.

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