The players
Charter Communications, Inc. (NASDAQ:CHTR) is not as big a name as, say, Comcast Corporation (NASDAQ:CMCSA), but it is the fourth-largest cable provider in the United States, at least by market cap. The company was recently beleaguered and underwater financially (entering bankruptcy in 2009), but has since become a market darling, largely fueled by buyout speculation. John Malone’s Liberty Media Corp (NASDAQ:LMCA) currently holds a 27% position in the company, with the ability to gain as much as 40%.
As a traditional cable operator in a heavily disrupted cable and telecom environment, Time Warner Cable Inc (NYSE:TWC) has shown a successful adaptability since being spun off from its parent company. But with major telecoms and tech companies quickly building out high-speed networks that can package TV, Internet, and phone all in one, Time Warner Cable Inc (NYSE:TWC) is on the hunt for an affordable way to catch up.
Finally, Liberty Media Corp (NASDAQ:LMCA) is a company ripe for merger, according to Malone. The company’s strong balance sheet and attractive assets make it a small but valuable firm with a top-notch management team — especially in the cable space. Prior to Liberty Media, John Malone owned Tele-Communications, which was sold to AT&T Inc. (NYSE:T) and was at one time the largest cable operator in the United States.
Last week, CNBC reported that TWC and Liberty Media Corp (NASDAQ:LMCA) had engaged in merger talks, with Charter as a center point of the discussion.
If it happens; if it doesn’t happen
While last week’s news had Time Warner up almost 10 points in trading, some analyst doubt on Tuesday brought the heat down a few degrees. The truth is, the merger would make sense for both parties, but would be most beneficial to Time Warner Cable Inc (NYSE:TWC).
