Feeds

Chuh! 'Grossly inadequate': Time Warner Cable rejects $62bn hostile takeover bid

Would-be suitor Charter vows to go direct to shareholders

The Essential Guide to IT Transformation

Time Warner Cable has rejected a hostile takeover bid from Charter Communications, calling its $62bn offer "grossly inadequate".

Charter yesterday formally offered to buy up its rival for $132.50 a share, including $83 in cash and the rest in its own stock, after months of acquisition talks between the companies. But Time immediately rejected the price, which was just higher (by 25 cents) than its price at the close of trading on Monday.

Charter has now said that it is going to take its deal directly to the company's shareholders, bypassing the board.

In a letter the company made public, Charter chief Tom Rutledge said that Time had rejected proposals in June and October last year and "refused to engage" until December. After that, negotiations appear to have gotten stuck on price.

"You came back with a verbal offer at an unrealistic price expectation which ignores a full 39 per cent premium already reflected in Time Warner Cable's stock (as of last Friday), widespread shareholder endorsement of a deal, and Time Warner Cable shareholders' approximately 45 per cent ownership in the upside of the proposed transaction," Rutledge complained.

He claimed that Time's shares had already lifted, showing investor interest in a deal, but there was "no genuine intent" from the company's management or board to sort out a merger.

Time Warner Cable CEO Rob Marcus told Reuters in an interview that he didn't think shareholders would go for the deal.

"In essence, these guys are just trying to get a premium asset at a bargain basement price," he said. "This makes the job of fending it off rather straightforward. Our shareholders will see it as what it is, an attempt to steal the company."

He added that the board was open to a price of $160 per share, made up of a hundred dollars in cash and another $60 in Charter stocks. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.