John Malone firm bids to buy Time Warner Cable for €52bn

Charter Communications, controlled by cable industry pioneer John Malone, has offered to buy Time Warner Cable for $56bn (€52bn), seeking to combine the number two and three US cable operators to compete against market leader Comcast.

The partners, who said the deal would mean better access to broadband internet for US consumers, faces questions about likely regulatory obstacles that helped sink Comcast’s earlier bid for Time Warner Cable.

The Federal Communications Commission said it would closely review the deal’s merits. The agency determines whether mergers are in the public interest.

“The commission will look to see how American consumers would benefit if the deal were to be approved,” FCC chairman Tom Wheeler said in a statement yesterday. “In applying the public interest test, an absence of harm is not sufficient.”

Charter, in which Liberty Broadband owns about 26%, offered about $195.71 in cash and stock for each Time Warner Cable share, based on Charter’s closing price on May 20. Including debt, the deal values Time Warner Cable at $78.7bn.

The deal, the latest in the US cable industry facing competition from satellite TV and web-based services, could re-energise critics who helped keep Comcast from acquiring TWC in a year-long saga. A key area of regulatory concern would be competition in broadband internet. A merger of Charter and Time Warner Cable, with other deals, would create a company that controls more than 20% of the US broadband market, according to research firm MoffettNathanson.

Charter’s current bid is much higher than its first offer of $37bn, which was rejected last year.