Charter Communications said Monday it has offered to buy Time Warner Cable for about $132.50 a share, an effort to outbid competitors to buy the second largest U.S. cable company as the industry battles multiple challenges.
The Stamford, Conn.-based company is willing to pay about $83 a share in cash and the rest in Charter stock, according to a letter sent to TWC by Charter CEO Tom Rutledge Monday. Including debt, the total price for TWC could exceed $61 billion, according to Bloomberg News.
Charter, which is the fourth largest cable operator in the U.S., has made other offers for TWC in recent months. But they were rejected as TWC weighed various options, including talks with Comcast.
"As you know, Time Warner Cable quickly rejected our proposals in June and October, and refused to engage until we met in December. I communicated a willingness to submit a revised proposal in the low $130s, including a cash component of approximately $83," Rutledge wrote.
Time Warner Cable didn't immediately comment on Charter's latest offer.
Shares of Time Warner Cable rose 0.97% in after-hours trading Monday to $133.69.
With competitors to vying to buy TWC, its shares have risen nearly 15% in the last six months. Citing the stock's rise and TWC's reluctance to engage more fully in talks for a merger, Rutledge is revealing his latest offer publicly "to bring the matter to shareholders directly," Charter said.
In the letter addressed to TWC CEO Robert Marcus, Rutledge also said TWC responded to his offer in December with "a verbal offer at an unrealistic price expectation."
"The financing to complete this transaction is fully negotiated, and we can be in a position to sign commitment letters in a matter of days," Rutledge wrote. "We also believe that the new combined company, through potential future swaps and divestitures with other industry participants, can help rationalize the geographic holdings of the industry into more efficient entities capable of providing better services and products into a very competitive marketplace."