NEW YORK (The Deal) -- Comcast (CMCSA) Chairman and CEO Brian Roberts pitched his company's $67 billion purchase of Time Warner Cable (TWC) as a consumer-friendly deal that would boost competition, during a Thursday, Feb. 13, investor call.
"It is pro-consumer, pro-competitive and strongly in the public interest," Roberts said of the proposed combination of the two largest cable operators.
Time Warner Cable shareholders would receive $158.82 per share in Comcast stock. The deal values Time Warner Cable's equity at $45.2 billion. Including debt, the transaction has a value of $67 billion. The valuation translates to 7.9 times Ebitda, but would fall to about 6.7 times Ebitda when factoring in expected savings.
The offer trumps a $132.50 per share hostile offer from Charter Communications Inc., which has backing from John Malone's Liberty Media (LMCA).Shares of Comcast dropped $1.99, or 3.6%, Thursday morning, to $53.25. Time Warner Cable stock gained $9.24, or nearly 7%, to 144.55. Charter fell $9.07, or about 6.6%, to $128.50. "The world changes very rapidly with technology," Roberts told investors regarding the cable industry. Pay-TV competition has increased greatly in a quarter century, he said, with some of Comcast's rivals providing national or international services. A combined Comcast and Time Warner Cable would expand in business services, he added, and push the evolution of cable services in cloud services and new devices. Roberts' vision echoes comments by Malone, who suggested in January that cable operators needed to consolidate "to attract the developers and innovators critical to remaining competitive." Malone's Liberty Media agreed to provide capital in support of Charter's more than $60 billion cash and stock offer. Charter showed no signs of backing down from its hostile bid after nominating a full slate of directors for Time Warner Cable's board. The target had pushed Charter to increase its offer and to boost the cash component of the offer. Time Warner Cable CEO Robert Marcus explained the acceptance of an all-stock bid from Comcast, saying the equity of the two suitors were "apples and oranges." He added that Time Warner Cable investors would hold more than 23% of the combined companies.
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