By Chelsey Dulaney, Sarah Rabil and Joe Flint, Dow Jones Business News
Charter Communications Inc. has struck a $55 billion cash-and-stock deal for Time Warner Cable Inc., giving cable mogul John Malone the prize he has been chasing for two years.
The offer is valued at about $195 a share, a 14% premium to Time Warner Cable’s last closing price. Including debt, the deal is valued at $78.7 billion.
Shares of Charter gained 3.2% to $181 in premarket trading, while Time Warner’s shares gained 11.3% to $190.50 a share.
The acquisition by Charter, which is backed by Mr. Malone’s Liberty Broadband Corp., would vault the cable operator into the ranks of the biggest U.S. broadband and pay-television companies.
The deal comes only a month after Time Warner Cable went back on the block after Comcast terminated the companies’ planned $45.2 billion merger in the face of serious pushback from Washington regulators. A Charter-TWC deal could be in for a stringent review in Washington as well, some analysts have said.
As part of the transaction, Charter will also merge with small operator Bright House Networks. The combined cable giant would have 23 million total customers, second only to Comcast’s 27 million among cable operators.