Charter may announce a three-way proposal to buy Time Warner Cable and a smaller cable provider, Bright House, as early as Tuesday, a person close to the talks confirmed on Monday.
Charter is the third largest cable provider in the country, and Time Warner Cable is second.
Earlier Monday, Bloomberg reported that Charter intends to pay $195 a share for Time Warner Cable.
Before the holiday weekend, Time Warner Cable stock closed at an all-time high of $171.18, amid speculation that a bid by Charter was imminent.
A Charter-Time Warner Cable- Bright House merger will have to pass muster with the same government regulators who stymied the attempt by Comcast to buy Time Warner Cable.
Comcast, the No. 1 cable TV provider in the United States, withdrew its offer on April 24, more than a year after setting out to buy Time Warner Cable.
Charter — whose largest shareholder is a company controlled by cable pioneer John Malone — is in some ways the company that triggered the wave of consolidation moves.
In 2013, Charter made a play to acquire Time Warner Cable when the stock price was between $110 and $130.
Deal talks subsequently began between Time Warner Cable and Comcast, leaving Charter to play catchup.
For regulatory reasons, if the Comcast-Time Warner Cable merger had been approved, Charter would have picked up about 3.9 million of that company’s subscribers.
Now, with a new bid on the table to acquire all of Time Warner Cable, about 11 million cable subscribers are in play, including key markets like New York and Los Angeles.
Charter has 4.1 million cable subscribers. Perhaps more importantly, it also has 4.9 million broadband subscribers. (Most homes buy both.)
Time Warner Cable has about 12 million broadband subscribers. All of the big cable distributors are gradually becoming broadband providers first, TV providers second.
Charter’s separate merger with Bright House will become a part of the planned three-way deal.
While no deal with Bright House has been signed yet, Charter CEO Tom Rutledge said last week that “we look forward to completing the transaction as planned, and our teams are working together to make that happen.”
(Time Warner Cable was a unit of Time Warner until 2009. The two companies are no longer related except by name.)
By Brian Stelter, CNN Money