Charter, Time Warner Cable Shareholders Approve Deal

Charter CEO Tom Rutledge - H 2014
AP Photo/Richard Drew

Charter CEO Tom Rutledge - H 2014

Charter, in which John Malone's Liberty Media owns a big stake, will pay more than $55 billion in cash and stock.

Charter Communications and Time Warner Cable (TWC) shareholders on Monday approved the planned acquisition of the latter by Charter, in which John Malone's Liberty Media owns a big stake.

When the two companies announced the deal in late May, following Comcast's decision to abandon its planned takeover of TWC amid regulatory opposition, they said it was valued at $78.7 billion, including debt. Charter will pay upwards of $55 billion in cash and stock.

Both companies on Monday held special shareholder meetings to vote on the deal. Charter's took place in Stamford, Conn., while TWC's event took place in New York. 

During the 15-minute TWC meeting, which was webcast, chairman and CEO Rob Marcus evoked the Yogi Berra quote, saying: "It does feel like deja vu all over again." But he also highlighted differences to the failed Comcast deal. The Charter deal is "even better for our shareholders” and brings together well-run companies in the industry, he said. And TWC is now “operationally stronger" than it was when the Comcast deal was approve, he added.

He also said the bigger scale should yield greater investments and efficiencies. Asked by one shareholder, Marcus said that "after a tremendous amount of deliberation [the company] came to the conclusion that this transaction maximizes shareholder value" and was “superior” to TWC remaining a standalone company.

Shareholders of Charter, led by CEO Tom Rutledge, on Monday also approved the TWC deal (in a meeting that wasn't webcast) along with an updated agreement for Charter to acquire Advance/Newhouse Partnership, the parent company of Bright House Networks, for $10.4 billion. The agreement provides for Charter and Advance/Newhouse to form a joint venture, of which Charter will own 86 or 87 percent. Charter will pay Advance/Newhouse common and convertible preferred units in the partnership in addition to $2 billion in cash. Both transactions are expected to close contemporaneously.

The Charter deals still need regulatory approval. Charter has argued they would benefit consumers and wouldn't reduce competition.

Charter is currently the fourth-largest U.S. cable firm, and TWC's is the second-largest. The two deals will make Charter the second-biggest cable operator in the country behind Comcast. 

The deals would continue the recent consolidation trend in the cable business. Europe's Altice has agreed to buy smaller U.S. cable operators Suddenlink and, more recently, Cablevision Systems.