The merger & acquisition boys are bored and frustrated, and that can spell trouble. The way these guys work is that stuff has to happen and it doesn’t much matter what it is. AOL & Time Warner? A match made in heaven! Hey, AOL! I think Time Warner likes you – you should ask her out.
So now the rumor mill is churning that Charter Communications, prompted by new investor Liberty Media, might buy Time Warner Cable. Or Cablevision. Or both!
It drives the M&A guys nuts that there are real deals out there being endlessly discussed but not being consummated, notably the endlessly dragged-out sale of Hulu (the latest? DirecTV is now bidding against Guggenheim Digital Media and the team of AT&T and Chernin Entertainment) and the grindingly slow acquisition of Sprint by somebody, which finally probably at this point will end up being Softbank, now that Dish has finally given up its suit of both Sprint and Clearwire.
And so Wall Streeters are vigorously spinning rumor out of coincidence like gossipy high school sophomores avoiding their homework. Did you see Greg Maffei and Glenn Britt in the same room!? Can’t you just see them together all the time?!?! OMG!!! YES!!!!!! Their economies of scale make them perfect for each other!!!!!!!!!!!!
Who knows, maybe the rumors will encourage Charter and TWC to get together. Or Cablevision. Or – OMG! Cox Communications? And you know who is just so adorable but she’s so quiet? Media One. Keep the gossip going, and who knows? Somebody just might get ideas.
But what about poor Dish? Can you believe the way Sprint treated her – er, it? Maybe if we could get her – er, you know – together with AT&T? Wouldn’t they go nice together? Their spectrum assets make them just so complementary, don’t you think?
The rumors are of course driving the value of the various stocks up (and of course what goes up can come down), which also makes Wall Streeters delirious with joy because, again, many of them don’t care much what happens, as long as something does.
The industry does consolidate. There are good reasons for companies to merge. Operational benefits can ensue from mergers that are completely separate from the commissions made by the bankers shepherding such a deal. But if there’s going to be a merger, let’s hope the principals – the actual merging parties – get together because they genuinely like each other, not because everyone else thinks they’d make such a cute couple.