Just a few weeks ago
Now, the nation's second-largest cable provider is one of the hottest properties around. Not only is
Like Time Warner Cable, Cox operates cable systems in Southern California. Getting Time Warner Cable's properties in Los Angeles and elsewhere would be a coup for the Atlanta company. News of Cox's potential interest was first reported by the
Wall Street is eager for a deal and has driven up Time Warner Cable stock. It closed Tuesday at $136.56, an all-time high.
Although Time Warner Cable hasn't commented on any specific suitor, executives have said they would entertain offers from potential buyers -- as long as any deal would provide shareholder value.
So how much would it take to acquire Time Warner Cable?
The company has a market capitalization that exceeds $38 billion. Any deal would probably be a combination of cash and stock. A prospective buyer would need at least $25 billion in cash or financing, according to Adam Ilkowitz, media analyst at Nomura Equity Research.
Ilkowitz's model assumes a $150 share price for Time Warner Cable. He figured that 60% of the deal price would come from cash or financing. The other 40% -- roughly $16.5 billion -- would probably be in the form of stock.
Charter, the nation's fourth-largest cable provider, would probably use a cash infusion of about $6.5 billion from cable pioneer
Such a cash infusion would allow Liberty to keep at least 25% of Charter if Charter were able to pull off its deal for Time Warner Cable, Ilkowitz said.
Comcast -- with a market capitalization of about $130 billion -- could more easily pull off a purchase, although the company already carries about $42 billion in debt and such a move would be closely scrutinized by media watchdogs and federal regulators.
The ambitions of Comcast have not been as transparent as Malone's or Charter's. Comcast executives have told Wall Street analysts the Philadelphia cable giant doesn't need to grow.
"We are really focused on executing our business plan and we really think there's a lot of organic growth opportunities," Comcast Chief Financial Officer Michael Angelakis said on a recent earnings call. "That being said, we ... always want to look at everything."
And, of course, Comcast's chief executive,
Taking over Time Warner Cable's systems in New York might be Comcast's play.
"It would complete the Northeastern corridor for them," Ilkowitz said, adding that Comcast already provides service in
And what's to stop a technology company, for example,
Google rolled out a super-fast broadband service, Google Fiber, in greater Kansas City, Mo., last year. It also plans to expand its Internet service in Austin, Texas, and Provo, Utah.
"I don't think Google would gain that much by buying a cable company," Ilkowitz said. "They are already accomplishing their purpose, which was to demonstrate the value of high-speed broadband service."
A Google representative said the company would not comment on "rumor and speculation."
Staff writer Joe Flint contributed to this story.