UPDATE, 2/18/14, 12:30 p.m. EST: This article’s twelfth paragraph has been updated to include information related to the fact that Robert Schumer is the brother of U.S. Senator Charles Schumer.


Robert Schumer, 55, cochair of the M&A practice at Paul, Weiss, Rifkind, Wharton & Garrison.


New York–based Time Warner Cable, the second-largest cable provider in the U.S.


Time Warner has agreed to be sold to rival Comcast, the nation’s largest cable provider, in a $45.2 billion all-stock transaction announced Thursday.


Under the terms of the transaction, Time Warner shareholders will receive 2.875 shares of Philadelphia-based Comcast stock for each Time Warner share and, ultimately, a 23 percent ownership stake in Comcast. The value of the stock changing hands is $45.2 billion, with the deal’s total value jumping to roughly $67 billion once assumed debt is added in. The deal values Time Warner at $158.82 per share—a 17.3 percent premium over the target’s Wednesday closing price and a 19.9 percent premium over a bid Charter Communications made for Time Warner last month.

Once the deal closes, Comcast plans to expand its share-buyback program by $10 billion in order to offset price dilution resulting from the issuance of new shares. The closing is expected to come by the end of the year, pending the approval of regulators and both companies’ shareholders.

As The Am Law Daily reported Thursday, Davis Polk & Wardwell and Willkie Farr & Gallagher are representing Comcast on the deal. Skadden, Arps, Slate, Meagher & Flom is also advising Time Warner.


Time Warner reached agreement with Comcast almost exactly a month after it rejected a $132.50-per-share offer from Liberty Media–backed Charter Communications that Time Warner CEO Rob Marcus labeled “grossly inadequate.” Marcus said his company would only be willing to negotiate a deal with Charter it raised its offer closer to $160 per share. Comcast’s offer landed right in that range.

Charter’s interest in Time Warner emerged last summer, when the Stamford, Conn.–based company made the first of several preliminary offers for the target. Charter, the nation’s fourth-largest cable company, also considered teaming up with Comcast on a deal that would have seen them divvy up Time Warner’s assets. As recently as late January, according to Bloomberg, the companies were close to an agreement that would have given Comcast Time Warner’s subscribers in New York City, North Carolina and New England, and Charter everyone else.

Comcast, meanwhile, had been considering a solo bid for some time. Reuters reported last fall that the cable giant was seeking advice about the potential regulatory hurdles it would face if it made a play for complete control of Time Warner. That advice is likely to be valuable now, as regulators weigh whether a marriage between country’s two biggest cable providers will harm consumers.

The companies have already moved to assuage regulators’ concerns. Comcast announced it would shed 3 million of Time Warner’s 11 million subscribers in order to keep its total U.S. market share under 30 percent. Both companies also noted that their lack of geographic overlap proves the combination will not reduce consumer choice.

Regulators may be less concerned over the merger’s implications for the cable industry than they are with how its impact on the broadband Internet market. The Wall Street Journal notes that the proposed tie-up could ignite the debate over how involved the government should be in regulating broadband providers. The Federal Communications Commission could use the deal as a vehicle for promoting its proposed so-called Net neutrality rules—which were struck down in federal court last month—that would force broadband providers to treat all Internet traffic the same, rather than imposing fees on companies based on how much bandwidth they use.

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