Time Warner Cable Inc. (TWC) thwarted a hostile bid by agreeing to sell itself to Comcast Corp. for $67 billion in stock and assumed debt on Feb. 13. A month earlier, Charter Communications Inc. CEO Thomas Rutledge had gone public with a letter to TWC counterpart Robert Marcus in which Charter said it would was willing to pay $132.50 a share for TWC, including $83 in cash. The bid valued TWC’s equity at roughly $37 billion. The company also has $25 billion in debt.
Even though TWC stock had traded in the $90s during the first half of last year, the company’s board rejected Charter’s offer as a lowball bid and said it wanted $160 a share. Comcast struck a deal at $158.82 in stock. The acquisition would be Comcast’s third blockbuster; the company paid $72 billion for AT&T Inc.’s broadband division in 2002 and acquired NBC Universal from General Electric Co. for a total of $31 billion in two transactions. Time Warner Cable is the product of a divestiture; Time Warner Inc. spun off its cable division to shareholders in 2009.
