Charter defends Time Warner bid after rejection

TV Set
Source: Getty

Charter Communications insisted yesterday it sees annual synergies of $500m (£305m) and other benefits such as tax savings from its proposed acquisition of Time Warner Cable, after the bid was knocked back immediately by its target’s board as “grossly inadequate”.

In an investor presentation posted on its website yesterday, Charter said annual synergies would grow to $750m over time.

Charter said the combined company would have to take on $20.5bn in new debt, or $72.16 per share, which would bring it to a leverage ratio of 4.8 times to five times.

Charter also said in its 30-page presentation that Charter would be able to accelerate Time Warner Cable’s customer and cash-flow growth, increase its margins and roll out higher Internet speeds.

On Monday, Charter, the number four cable operator, proposed paying $132.50 per share, consisting of around $83 per share in cash and its own stock, in a deal valued at $37.3bn excluding debt.

Charter’s chief executive Tom Rutledge said the company now planned to take the deal directly to Time Warner Cable shareholders.