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NY Post: Cable Giant Charter Seeks to Acquire Rival Cox

NY Post: Cable Giant Charter Seeks to Acquire Rival Cox
Vicente Barcelo Varona | Dreamstime.com

By    |   Thursday, 22 June 2017 10:13 AM

Charter Communications Inc. reportedly is considering a plan to acquire Cox Communications.

Charter Chief Executive Tom Rutledge is eyeing family-owned Cox despite the fact that the latter has repeatedly rejected overtures from larger rivals, industry insiders told the New York Post. Charter is a nationwide cable giant whose properties include Spectrum, formerly Time Warner Cable.

“Tom wants to buy Cox,” one highly placed cable source told the Post. Another confirmed the news, but stressed there have been no formal approaches.

“If they’re going to sell it to anyone, they’re going to sell it to an old cable guy,” one industry source told the Post.

With the television industry facing growing numbers of TV viewers canceling their cable subscriptions to watch shows online, as well as a softening ad market, some Wall Street analysts anticipate consolidation in the media industry.

Rutledge is a former chief operating officer at Cablevision, which was acquired for $17.7 billion from the Dolan family last year by French-based Altice NV, which has also acquired Suddenlink.

Cox, the third-largest cable company in the US with 6.2 million customers, has long said it isn’t for sale.

“Cox has been very clear and consistent that we are not for sale and, in fact, we’re aggressively investing in our network, products and strategic partnerships and investments of our own,” Cox spokesman Todd Smith told The Post on Wednesday. Charter declined to comment.

Charter itself was at one time considered a possible target for Verizon Communications Inc. In January, Reuters reported Verizon was interested in exploring a combination with Charter among a long list of potential acquisition targets.

But an agreement between Charter and rival cable provider Comcast Corp. announced on Monday would prohibit a Verizon-Charter combination.

Meanwhile, Verizon doesn't see an urgent need to undertake a big strategic merger or acquisition, its chief executive recently said, as some Wall Street analysts have urged the wireless company to do.

Some analysts believe Verizon needs a more transformative acquisition than its $4.48 billion deal for Yahoo Inc.'s core business to diversify away from the slow-growth wireless industry as it battles smaller rivals in an oversaturated market for U.S. mobile phone service, Reuters reported.

Verizon, the No. 1 U.S. wireless carrier, last month reported its first-ever quarterly loss in subscribers who pay a monthly bill, its most valuable customers.

After saying he was referring to M&A speculation, Chief Executive Lowell McAdam told a recent meeting with analysts, "We don't feel the urgency that seems to be out there in the analyst community, the banking community and the media."

Verizon's main competitor, AT&T Inc., is planning an $85.4 billion acquisition of Time Warner Inc., which would give it control of cable TV channels like HBO and other coveted media assets.

Meanwhile, the S&P 500 Telecommunications Services Sector index as-we-know it may have to hang up on investors, as its creators are considering a restructuring of the once-hot index which has shrunk to just four companies from 14, Reuters reported.

After years of consolidation and diversification, today's telecommunications sector would be unrecognizable to investors in the index, which was created in 1996.

The index could be three stocks in the third quarter.

"The telecom sector has evolved," said David Blitzer, Managing Director and Chairman of the Index Committee, S&P Dow Jones Indices. "We have been discussing how these changes are impacting the market and expect to consult with investors in the near future."

(Newsmax wires services contributed to this report).

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Charter Communications reportedly is considering a plan to acquire Cox Communications.
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Thursday, 22 June 2017 10:13 AM
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