John Malone, the 'cable cowboy' who shot first in $60bn fight

New York

The opening shots have been fired in the first big takeover battle of 2014 – for control of Time Warner Cable (TWC) – and lurking behind the scenes is John Malone, the original "cable cowboy" who is eager to get firmly back in the saddle.

TWC, the second-biggest American cable operator, has rejected a takeover proposal from the fourth biggest. TWC called Charter Communications' offer – worth more than $60bn (£36.5bn) including debt, roughly $132.50 per share – a "low ball" offer that is "grossly inadequate".

Mr Malone's Liberty Media is the biggest shareholder in Charter, holding roughly 27 per cent of the stock, and is helping to drive the takeover approach and general consolidation in the sector around the world. TWC is attractive to Mr Malone and Charter for many reasons. As well as its size and reach, it has some trophy assets – its regional operations broadcast LA Dodgers baseball games and LA Lakers basketball games.

The billionaire Mr Malone is a legendary dealmaker in the American media and telecoms markets, who made his fortune around the same time as his old friend and rival Ted Turner. They rode a wave of consolidation in the 1980s and 1990s, and are two of the biggest landowners in the United States.

Mr Malone has recently regained his appetite for a deal. For a start, Liberty Global bought UK-based Virgin Media for roughly $23bn, including debt, last year. And Mr Malone has urged even more cooperation and consolidation among the world's biggest cable companies.

"I think we do want to bring back the days of… Ted Turner, the days when we all got together, because together we provided national scale," Mr Malone said in a rare interview last year with CNBC. "Now I think we have the opportunity to create global scale."

Mr Malone said markets were forcing change on the cable operators, and the biggest players have a unique opportunity to work together. "I think it's at a point in history when the most addictive thing in the communications world is high-speed connectivity," he said. "Everywhere in the world that we operate, we've just seen the public want more and more data rate. Whether it's wireless or wired, there's a big appetite for it. Cable technology right now is the most cost-effective way to deliver that growth in speed." But Mr Malone is not the only media titan involved in this particular deal. The two chief executives at Charter and TWC are also shooting from the hip.

"We are fully prepared to finalise a deal on an extremely expedited basis," said Tom Rutledge, Charter's chief executive who was formerly an executive at TWC.

"We believe that time is of the essence to prepare our companies to meet the challenges of the industry, which is why we have decided to announce the status of our discussions to date to both sets of shareholders," he added.

TWC shareholders would still hold about 45 per cent of the merged company's stock.

Rob Marcus, the chief executive of TWC, was quick to respond: "Charter's latest proposal is a non-starter. First and foremost, it substantially undervalues TWC…"

But he then added: "We are not seeking to sell the company, but… we made it clear to Charter that our board is open to a transaction with Charter at a price of $160 per TWC share, consisting of $100 in cash and $60 per share of Charter common stock."

So, as always, it comes down to price.

If TWC and Charter can't reach an agreement in time, other predators may swoop, with speculation already mounting that Comcast, the leading American cable operator, could enter the fray – either bidding on its own or in partnership with Charter.

TWC's shares have risen roughly 40 per cent since June, amid speculation about cable company mergers.

Its stock price was up about 3 per cent to $136.40 on Tuesday morning, indicating that the market expects there will be a higher offer.

The animal spirits of M&A are back. Watch this space.

Suggested Topics
News
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Sport
David Moyes and Louis van Gaal
football
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
tv
PROMOTED VIDEO
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
life
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
Extras
indybest
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits