Assuming both deals are completed, Advance/Newhouse will own 13-14 percent of 'New Charter', TWC shareholders will have 40-41 percent and Liberty Broadband will hold 19-20 percent. The exact ratios will depend on how many TWC shareholders opt for the different offers of cash and shares. Charter is offering a choice of USD 100 cash and 0.5409 shares of Charter for each TWC share, or USD 115 cash and 0.4562 shares.
Liberty Broadband, controlled by cable mogul John Malone and currently Charter's largest shareholder, has agreed to buy USD 4.3 billion of new shares in Charter after the closing of the TWC takeover. It also earlier agreed to buy USD 700 million in Charter as part of the Bright House deal, in order to avoid dilution of its stake in Charter. Liberty and Advance/Newhouse will sign a shareholders pact after the deal is completed, ensuring pre-emptive rights on each other's shares in Charter and a proxy vote for Liberty on part of Advance/Newhouse's shares.
The combination of Charter, Time Warner Cable and Bright House will create the US's second-largest cable operator, serving 23.9 million customers in 41 states. Charter's current CEO Tom Rutledge will continue to lead the group. Charter said the merger will help accelerate the roll-out of faster broadband speeds, fibre networks and more Wi-Fi and advanced TV services for customers. Pending regulatory and shareholder approvals, the mergers are expected to close by the end of 2015.
The chairman of the US Federal Communications Commission Tom Wheeler issued a statement shortly after Charter announced the takeovers, saying each merger is assessed on whether it would be in the public interest. The FCC earlier rejected a planned takeover of TWC by Comcast, the US's biggest cable operator. Wheeler said that any new deal would need to show not only that it doesn't cause any harm to the market, but also that American consumers would benefit from the deal.
