Time Warner Cable Inc (TWC): This Cable Business Seems to Be a Good Buy

John Malone, the talented mind behind Liberty Media Corp (NASDAQ:LMCA), has acquired 26.9 million shares and 1.1 million warrants, owning around 27.3% of Charter Communications. He would like to have up to four board seats on Charter’s board, influencing the fourth-largest cable operator in the U.S., with 5.4 million residential and commercial customers. Consequently, Liberty Media has Charter Communications in its portfolio, including Sirius XM Radio Inc (NASDAQ:SIRI) and Live Nation Entertainment.

By increasing his stake in Charter Communications, John Malone is getting closer to his goal of global consolidation of the cable business. The investment community has speculated that John Malone might use Charter Communication as “an industry consolidator” for the U.S. cable business. Indeed, John Malone said that he would like Charter Communications to be “a horizontal acquisition machine.” Consequently, the talk to acquire Time Warner Cable Inc (NYSE:TWC) is totally possible.

My Foolish take

Time Warner Cable could really be a good acquisition candidate for John Malone, through Charter Communications. If Time Warner Cable has a similar valuation to Charter Communications, Time Warner Cable could be worth more than $41.2 billion, or more than $140 per share, 36% higher to its current trading price. I personally think with a 2.80% dividend yield, Time Warner Cable could be a good long-term position for patient investors.

The article This Cable Business Seems to Be a Good Buy originally appeared on Fool.com and is written by Anh Hoang.

Anh HOANG has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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