Comcast’s $45 billion agreement to acquire Time Warner Cable may or may not succeed, according to Liberty Media president and CEO Greg Maffei — but either way, Liberty-backed Charter Communications is poised to pounce on opportunities to pick up cable subscribers.
“We will certainly not take anything off the table in terms of what we think are in the best interests of Liberty Media shareholders,” said Maffei, speaking on the company’s fourth-quarter 2013 earnings call.
After months of fruitless attempts at private dealmaking, Charter — in conjunction with John Malone’s Liberty Media, which owns 27% of the cable operator — launched a hostile takeover for Time Warner Cable in January with an offer valued at about $37 billion (excluding debt). Comcast then swooped in with its higher offer earlier this month.
Comcast, in announcing its TW Cable bid, said it was prepared to divest about 3 million subscribers to alleviate regulatory concerns about industry consolidation.
Maffei acknowledged that Liberty and Charter could be interested in any divestitures, or in a scenario in which it could be in a position to act if the Comcast-TW Cable merger falls through. Maffei said he assumed that Comcast’s bid for Time Warner Cable would be approved by regulators under certain conditions, and the question is “how onerous those conditions will be.”
Investors are eager to back a roll up of cable operators, according to Maffei. “We certainly learned in this process that there were many investors interested in consolidation,” he said. “We had a lot of people approach us… who were willing to co-invest with us in cable consolidation.”
On Charter’s Q4 earnings call a week ago, CEO Tom Rutledge said the MSO continues to look at potential acquisitions. “Notwithstanding everything that has happened, we are still interested in wisely acquiring subscribers,” Rutledge said, but he declined to discuss any specific deals Charter may be evaluating.
On Liberty Media’s call, Maffei addressed the company’s plan to acquire the 48% of satellite-radio provider SiriusXM that it does not own. “Our view is that it’s the right deal, it’s a good deal,” he said, claiming the transaction was not driven by the Charter bid for TW Cable. Maffei added that Liberty Media currently controls SiriusXM and will continue to do so if the deal is unsuccessful.
For Q4 2013, Liberty Media posted revenue of $1 billion — up 12%, primarily due to the acquisition of the controlling interest in SiriusXM in January 2013 — and net income of $65.2 million, down from $156.2 million in the fourth quarter of 2012.