|[January 13, 2014]
Time Warner Cable Board of Directors Unanimously Rejects Third Grossly Inadequate Proposal from Charter Communications
NEW YORK --(Business Wire)--
Time Warner Cable Inc. (NYSE:TWC) said today that its Board of Directors
has unanimously rejected a third grossly inadequate proposal from
Charter Communications (News - Alert) (NASDAQ: CHTR) to acquire TWC. The proposal was
described only generally in a letter received today from Charter as
being in the "low $130s." Based on an interview with Charter CEO, Tom
Rutledge, Bloomberg (News - Alert) reported that the offer was for $132.50, consisting
of $83.00 in cash and $49.50 in Charter stock. Charter had previously
offered cash and stock nominally valued at approximately $114 in June
and approximately $127 in October.
Rob Marcus, Time Warner (News - Alert) Cable's Chairman and Chief Executive Officer,
said: "Charter's latest proposal is a non-starter. First and foremost,
it substantially undervalues TWC and would represent an EBITDA multiple
of approximately 7X, well below past transactions in the cable sector.
Indeed, our high-quality assets, unique scale, synergy potential, growth
opportunities and strong financial position should command a premium
valuation compared to precedent transactions, not the discount offered
by Charter. Not only is the nominal valuation far too low, but because a
significant portion of the purchase price would be in Charter stock, the
actual value delivered to TWC shareholders could be substantially lower
given the valuation, operational, and significant balance sheet risks
embedded in Charter's stock."
"TWC is a one-of-a-kind company. We are the only large pure-play,
non-family controlled cable operator in the United States, with 15
million customers in some of the country's best markets. We have an
incredibly robust network, having invested almost $15 billion in CapEx
since our separation from Time Warner Inc. in 2009. We are continually
enhancing the capacity of that network to support future growth and
expansion of our product offerings, adding significantly faster data
speeds and advanced multi-platform video offerings. In short, we're in a
great business and confident we have the right assets, the right people
and the right strategic plan to deliver great experiences to our
customers and create significant value for our shareholders. Our
shareholders deserve to realize that value and benefit from the unique
position of the company."
Marcus continued, "Our job above all is to act in the best interests of
our shareholders. We are not seeking to sell the company, but consistent
with what we have always said about maximizing shareholder value, on
December 27 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, subject to a
symmetrical 20 percent collar to protect our shareholders on the value
of Charter shares, which currently trade at a historically high
multiple. The $160 price represents a forward multiple of only
approximately 8X. We gave Charter our bottom line, but rather than
pursuing this path, Charter has chosen to go public with its third
lowball offer trying to pressure TWC's Board into selling the Company
at a grossly inadequate price."
N.J. Nicholas, Jr., the independent lead director of the TWC Board,
added, "The Board takes very seriously its obligation to maximize
shareholder value and, on that basis, we gave Charter our bottom line.
The Charter proposal doesn't come close to providing our shareholders
with the kind of value and protections they should expect in a
transaction. In fact, it would transfer significant value from our
shareholders to Charter shareholders, while dramatically increasing the
risk profile for our shareholders. As such, it is wholly inconsistent
with the interests of our investors and our responsibilities as a Board."
Morgan Stanley, Allen & Company and Citigroup are serving as financial
advisors to Time Warner Cable, and Paul, Weiss, Rifkind, Wharton &
Garrison LLP is legal counsel.
About Time Warner Cable
Time Warner Cable Inc. (NYSE: TWC) is among the largest providers of
video, high-speed data and voice services in the United States,
connecting more than 15 million customers to entertainment, information
and each other. Time Warner Cable Business Class offers data, video and
voice services to businesses of all sizes, cell tower backhaul services
to wireless carriers and enterprise-class, cloud-enabled hosting,
managed applications and services. Time Warner Cable Media, the
advertising arm of Time Warner Cable, offers national, regional and
local companies innovative advertising solutions. More information about
the services of Time Warner Cable is available at www.twc.com,
Time Warner Cable expects to file a proxy statement with the U.S.
Securities and Exchange Commission ("SEC (News - Alert)") and to provide any definitive
proxy statement to its security holders. INVESTORS AND SECURITY HOLDERS
OF TIME WARNER CABLE ARE URGED TO READ THIS DOCUMENT AND ANY OTHER
DOCUMENTS FILED BY TIME WARNER CABLE WITH THE SEC CAREFULLY IN THEIR
ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders will be able to
obtain free copies of the definitive proxy statement (when available)
and any other documents filed with the SEC by Time Warner Cable through
the web site maintained by the SEC at http://www.sec.gov.
CERTAIN INFORMATION REGARDING PARTICIPANTS
Time Warner Cable and certain of its directors and executive officers
may be deemed to be participants in a solicitation under the rules of
the SEC. Security holders may obtain information regarding the names,
affiliations and interests of Time Warner Cable's directors and
executive officers in Time Warner Cable's Annual Report on Form 10-K for
the year ended December 31, 2012, which was filed with the SEC on
February 15, 2013, and its proxy statement for the 2013 Annual Meeting,
which was filed with the SEC on April 4, 2013. These documents can be
obtained free of charge from the sources indicated above. Additional
information regarding the interests of these participants in any proxy
solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, will also be included in any proxy
statement and other relevant materials to be filed with the SEC if and
when they become available.
FORWARD LOOKING STATEMENTS AND DISCLAIMERS
This communication does not constitute an offer to buy or solicitation
of an offer to sell any securities. This document includes certain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and we intend that all such statements be
covered by the safe harbor provisions of the federal securities laws.
Statements herein regarding future financial and operating results and
any other statements about future expectations constitute
"forward-looking statements." These forward-looking statements may be
identified by words such as "believe," "expects," "anticipates,"
"projects," "intends," "should," "estimates" or similar expressions.
These statements are based on management's current expectations or
beliefs, and are subject to uncertainty and changes in circumstances.
Actual results may vary materially from those expressed or implied by
the statements herein due to changes in economic, business, competitive,
technological, strategic and/or regulatory factors, and other factors
affecting the operations of Time Warner Cable. More detailed information
about these factors may be found in filings by Time Warner Cable with
the SEC, including its most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q. Time Warner Cable is under no obligation
to, and expressly disclaims any such obligation to, update or alter its
forward-looking statements, whether as a result of new information,
future events, or otherwise.
[ Back To TMCnet.com's Homepage ]