Charter Communications (CHTR) today announced an agreement to acquire Time Warner Cable (TWC) for $78.7 billion in a cash and stock deal that would create a more formidable rival to Comcast (CMCSA).
Charter said it will pay $195.71 a share, representing a 14% premium over Time Warner’s closing price on Friday, with $100 in cash and the remainder in its own stock. “With today’s announcement, we have delivered on our commitment to maximizing shareholder value,” Time Warner Cable CEO Rob Marcus said in a statement. Time Warner Cable’s stock, which closed at $171.18 last Friday, is up nearly 16 points, or 9.25%, in pre-market trading on Tuesday.
The announcement comes a year after Charter offered about $132.50/shr for Time Warner Cable, putting the value of the deal at around $61 billion including debt. Charter’s offer was rejected at the time when Comcast announced its intention to acquire Time Warner.
The combination of the two companies advances a wave of consolidation across the media industry. Charter, backed by the billionaire cable pioneer John Malone, is the third biggest cable television provider in the country, and Time Warner Cable is the second biggest.