Controlling shareholder proposed combining cabler with RCN
HOLLYWOOD — Jerald Kent, CEO of Charter Communications, ankled Monday in an apparent flap with controlling shareholder Paul Allen over the cabler’s proposed combo with another Allen-owned cable outfit, RCN.
Charter, which serves almost 7 million customers in 40 states and ranks as the nation’s fourth-biggest cabler, said it would name a new CEO as soon as possible. Its shares hit a new 52-week low on news of Kent’s exit, tumbling $3.19, or 19.9%, to $12.81.
The St. Louis-based company said Kent’s contract was up at the end of the year and noted he’s agreed to remain a consultant to Charter through the next few months.
In a statement, Kent called the move “a gut-wrenching decision” but gave no reason for his exit.
But some observers said it appears the chief exec has had a disagreement with Allen over the billionaire financier’s plan to combine Charter with RCN, a money-losing cabler known mostly for entering markets dominated by other cable system operators.
“There has obviously been a falling out,” Invesco analyst Donna Jaegers said. Merging Charter and RCN “messes up the balance sheet, and it would take a lot more work to make sure things were turned around.”
Two weeks ago, Kent told an investors conference in Los Angeles that Charter believes basic-cable subs growth will fall short of a previous 2% projection.
(Bloomberg News contributed to this report.)