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TheStreet Open House

Cox Consider Bid To Acquire Time Warner Cable

Stocks in this article: CHTRCMCSALMCATWC

Cox Communications, the third largest cable operator in the United States, is considering submitting its own proposal or joining other entities to acquire Time Warner Cable Inc (TWC), according to a report from the Wall Street Journal based on information from sources familiar with its plan.

Cox Communications expanding business

According to a person familiar with Cox’s plan, it is exploring opportunities to expand its business, and the company made it clear that it is not interested to sell itself. In the past, many perceived the company as a potential takeover target by its peers in the industry.

Privately-held Cox Communications has 4.5 million television subscribers, and it is a bit larger than Charter Communications, Inc. (CHTR), which is also pursuing a takeover bid for Time Warner Cable Inc (TWC). John Malone, chairman of Liberty Media Corp (LMCA) initiated a deal between Charter Communications Inc (CHTR) and Time Warner Cable. Malone aims to regain his status and shake up the cable industry as Cable King. Liberty Media owns 27% stake in Charter Communications.

Time Warner Cable and Charter Communication’s deal

Time Warner Cable Inc (TWC) rejected Charter Communication's initial proposal, and it recently stated that it will conduct a thorough evaluation of any proposal before entering into a final agreement with any entity.

Comcast Corporation (CMCSA), the largest cable company in the country, is also considering the possibility of submitting an acquisition proposal for Time Warner Cable or supporting Charter Communication's bid. Observers in the cable industry believed regulators might object Comcast's merger with Time Warner Cable because of its leading position in the industry.

On the other hand, some people believed that Charter Communications, Inc. (CHTR) could face potential problems because it needs to borrow a huge amount to fund a transaction to acquire Time Warner. It would need to offer a generous premium to the shares of its rival. Time Warner Cable Inc (TWC) is currently trading around $136.68 per share, up by 3.95% after hours on Tuesday.

The stock price of Charter Communications was up by 1.36% to $136.12 a share and the shares of Comcast Corporation were slightly down at $49.78 per share.

-By Marie Cabural

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