- March 28, 2024
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Charter Communications has closed a $10.4 billion deal to acquire regional cable operator Bright House Networks.
The deal — affecting 2 million video customers in Florida, Alabama, Indiana, Michigan and California -- will give the Connecticut-based Charter 74% of Bright House, leaving Advance/Newhouse a 26% share in the company. Charter will pay $2 billion in cash to Advance/Newhouse, and purchase the rest through a stock acquisition.
The deal, according to a release, is still subject to several conditions, including shareholder approval and Time Warner Cable not matching the offer.
“Bright House Networks provides Charter with important operating, financial and tax benefits, as well as strategic flexibility,” says Tom Rutledge, president and CEO of Charter, in a release. “Bright House has built outstanding cable systems in attractive markets that are either complete, or contiguous with the New Charter footprint.”
New Charter is the CCH I LLC subsidiary that will complete the transaction. Once it's done, it will transform Bright House from the sixth-largest cable provider in the country to the second-largest.
The deal could still hit some hurdles, especially after Comcast Inc.'s $45 billion purchase of Time Warner Cable has been placed on a temporary hold.
As part of the deal, Advance/Newhouse will receive $5.9 billion of exchangeable common partnership units, and $2.5 billion of convertible preferred partnership units. Those charters are each exchangeable into 34.3 million Charter Class A common shares, priced at $173.
“At Bright House Networks, we are very proud of what we have achieved, from the quality of our infrastructure to the level of service our employees provide to customers every day,” says Steven Miron, CEO of Bright House, in a release. “Our family has known and worked with Tom Rutledge for more than 20 years. Tom managed cable systems that were part of our partnership with Time Warner Cable prior to the formation of Bright House Networks.”
Charter, which trades on the Nasdaq under the symbol CHTR, currently is the fourth-largest cable operator in the country. The share price 30 minutes after Charter's announcement was up more than 7%, at $196.11.
Charter reported a loss of $183 million, or $1.70 per share, in 2014 on revenue of $9.1 billion, compared to a $169 million, or $1.65 per share loss, the year before on revenue of $8.2 billion.