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
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
News
people
News
Campbell: ‘Sometimes you have to be economical with the truth’
newsFormer spin doctor says MPs should study tactics of leading sports figures like José Mourinho
News
news
ebooks
ebooksA special investigation by Andy McSmith
Voices
Lance Corporal Joshua Leakey VC
voicesBeware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Life and Style
Alexander McQueen's AW 2009/10 collection during Paris Fashion Week
fashionMeet the collaborators who helped create the late designer’s notorious spectacles
Sport
football
News
i100
News
Perry says: 'Psychiatrists give help because they need help. You would not be working in mental health if you didn't have a curiosity about how the mind works.'
people
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

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?