John Malone, the chairman of Liberty Media and Liberty Global, is exploring ways for Charter Communications Inc. to buy out Time Warner Cable Inc. (TWC). Time Warner has been resisting deal talks. Time Warner Cable is known as being one of the top Internet service providers in 29 states.
Liberty Media Corporation owns 27% of Charter and Malone is working out a structure with enough cash to convince Time Warner Cable investors to accept the deal. Time Warner Cable does not believe that Liberty will be able to come up with a decent offer.
Chater’s debt exceeds their $12.5 billion market cap while Time Warner Cable is valued at $30.8 billion. Charter would have a lot more to gain in a merger. Liberty Media is considering borrowing against their own balance sheet or the assets of Time Warner Cable to raise the cash for an offer. Comcast Corp. employed a similar strategy when buying out NBC Universal from General Electric in 2011.