Comcast selling some cable firms
PHILADELPHIA (AP) -- Comcast announced on Monday a series of transactions designed to lower its debt and help clear the way for its acquisition of Time Warner Cable, including the sale of cable systems with 1.4 million subscribers to Charter and the spinoff of an additional 2.5 million subscribers into a new company.
The approximately 2.5 million subscribers will be part of a new publicly traded cable provider that Philadelphia-based Comcast is creating and spinning off.
Charter Communications Inc. will form a new holding company that will own about a third of the Comcast spinoff, while shareholders of Comcast and the former Time Warner Cable will own the remaining 67 percent of the new company.
In February Comcast Corp.’s $45.2 billion bid for Time Warner Cable Inc. topped Charter’s offer.
Comcast said that the transactions will give it less than 30 percent of homes that subscribe to cable or satellite TV in the U.S. after its combination with Time Warner Cable closes.
Comcast said in an investor presentation that it puts the deals’ initial value to Comcast shareholders at $19.5 billion.
Charter said the acquisition of the Time Warner Cable subscribers will boost its residential and commercial video customer base to about 5.7 million from 4.4 million. Charter and Comcast will also exchange about 1.6 million customers.
Charter estimates that the acquisition of the cable systems will cost approximately $7.3 billion. It estimates the value of the spinoff company at about $14.3 billion.
Charter President and CEO Thomas Rutledge said during a conference call that the transactions will help broaden Charter’s footprint in the Midwest and Southeast. The Stamford, Conn., company will acquire systems in Ohio, Kentucky, Wisconsin, Indiana and Alabama. It will also shed systems in California, New England, Tennessee, Georgia, North Carolina, Texas, Oregon, Washington and Virginia.
Rutledge said the new footprint will give Charter access to significantly underpenetrated areas and also will be easier to operate.
The spinoff company Comcast is creating will own systems adjacent to Charter systems in Michigan, Minnesota, Indiana, Alabama, Eastern Tennessee, Kentucky and Wisconsin.
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