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Rutledge / Maffei: TWC not the only acquisition target out there

Tue, 12/03/2013 - 12:38pm
Brian Santo

It has become even less clear exactly who might buy whom among MSOs with the latest round of public comments from executives of the companies involved.

Charter Communications CEO Tom Rutledge last week was quoted saying there is little reason to buy Time Warner Cable, and more recently opined on CNBC that Charter does not need any more acquisitions (it last year bought the former Bresnan properties) to grow its business.

Liberty Media CEO Greg Maffei, sitting in on the same interview session, said that for Charter, TWC is not the only possible acquisition target that might be “an attractive fit.” Liberty Media has a 27 percent position in Charter.

The largest MSOs always chat with each other about consolidating, but in the past these discussions have almost always been informal and speculative because – for the biggest MSOs – there are few if any strongly compelling reasons to combine.

But John Malone, who controls Liberty Media, is clearly intent on using Charter to buy another major MSO. His favored target – TWC – is tepid about being acquired.

But investors are aroused and many are agitating for a deal – any deal – which serves Malone’s interests. The rest of the industry does not seem so sure.

Indeed, it appears that the other MSOs are now considering a variety of consolidation options, some that include Malone, Liberty, and Charter, and some that do not.  

Last week’s rumors were that Charter and Comcast might combine on a bid for TWC and split TWC’s systems amongst themselves, and that privately-held Cox might be an acquisition target. Comcast seems uninterested enough in getting involved in an acquisition to suck the air out of that rumor, and Cox stated definitively it is not for sale (though it apparently remains open to buying someone, should the opportunity arise.)

Which is bringing speculation back this week to Cablevision.

Analyst Amy Yong of Macquarie Capital wrote “It’s hard to ignore that Cablevision has some of the best zip codes in the country including New York, NY, Fairfield County, CT, and Bergen County, NJ. If pay TV households get reshuffled and swaps enter into the equation, CVC could get broken apart and sold to Comcast, Time Warner Cable, and Charter.

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